Q&As

Is it possible for unlimited companies to sub-divide shares?

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Published by a LexisNexis Corporate expert
Published on: 08 March 2022

One of the main advantages of incorporating an Unlimited company is the fact that it has such flexible Capital maintenance rules and is not subject to the vast proportion of the Companies Act 2006 (CA 2006) provisions regarding share capital.

The provisions of CA 2006, s 618 on the sub-division of Shares apply only to limited companies, so will not apply to unlimited companies.

The articles of association of the unlimited company in question must be checked for its provisions on the sub-division of shares. There are no model articles provided for unlimited companies under CA 2006. CA 2006, s 20 only applies the default model articles

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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Shares definition
What does Shares mean?

The CA 2006 merely provides that a share is a share in the company's share capital. A company's share capital comprises the number of shares issued by it to investors either on or after incorporation. Those investors then become the shareholders in the company. A shareholder’s shares are their personal property. By contrast, the assets of a company are owned by the company itself. Owning shares does not entitle a shareholder to any property rights in the company's assets.

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