Shares in a company may be allotted or transferred to any number of holders (whether they are natural persons or corporate entities) to be held jointly, except shares allotted to the subscribers to a company’s memorandum of association (being Subscriber shares). It is not possible for subscriber shares to be allotted on the basis that they are held jointly, as Companies House interprets sections 7 and 8 of the Companies Act 2006 (CA 2006) as requiring a subscriber to be a single natural person or a single corporate entity.
In practice, it is common for a company to limit the maximum number of shareholders that may jointly own shares in its Articles of association (usually to four, eg the model articles for a public company in art 63(5)(e) allow the directors to refuse to register a transfer to more than four transferees, as does 1985 Table A, reg 24).
If there is no limit on the number of shareholders that may jointly own shares set out in a company’s articles, many articles give directors a general right to refuse to register
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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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