Authorised minimum share capital definition

View the related practice notes about Authorised minimum share capital

Share capital and its maintenance

It is a fundamental rule of English company law that a limited company having a share capital must maintain that capital; a company must not reduce it or return it to shareholders, except as prescribed by law. This capital maintenance rule is intended to protect a company’s creditors by ensuring that the assets that represent the share capital of a company remain available to them for future recourse. It underlies many of the CA 2006 provisions relating to share capital, including the requirements and restrictions relating to:•the nominal value of shares•payment for shares•distributions to a company’s members•the provision of financial assistance by a company for the acquisition of shares•the redemption of shares•share buybacks, and•reductions of capitalThe amount of shares that a company can issue to investors, its ‘issued share capital’, was historically limited by the amount of authorised share capital set out in its memorandum of association on incorporation. A company could not issue shares beyond the limit in its authorised share capital. If it did, the issue was void and the person to whom the...

Tailoring a shelf company

STOP PRESS: The Economic Crime and Corporate Transparency Act 2023 (ECCTA 2023) received Royal Assent on 26 October 2023. It is intended to enhance corporate transparency in the UK, principally through Companies House reforms and amendments to provisions of the Companies Act 2006. It also seeks to modernise the regulatory framework for limited partnerships and create stronger powers to tackle economic crime. ECCTA 2023 is to come into force in stages. This Practice Note reflects the parts of ECCTA 2023 in force as at 4 March 2024. For further information, see Practice Notes: Implementation of the Economic Crime and Corporate Transparency Act 2023 and The Economic Crime and Corporate Transparency Act 2023—tracker.A person wishing to set up a new company has the following options:•they can incorporate a new company in accordance with the Companies Act 2006 (CA 2006), which is tailored to meet its specific requirements upon incorporation (a tailor-made company), or•they can purchase a ready-made company 'off-the-shelf' (ie, a company that has already been incorporated but which has never traded, or...

View the related precedents about Authorised minimum share capital

Board minutes of a private or unlisted public company approving a redemption of shares

Board minutes of a private or unlisted public company approving a redemption of shares Company number: [insert company number] [insert company name] [LIMITED OR PLC] Minutes of a meeting of the board of directors (the Meeting) of [insert full name of company] Limited (the Company) Held at [insert place of meeting] Held on [insert day, month and year of meeting] at [insert time of meeting][am OR pm] Present: [Insert names of the director(s) physically present][[Insert names of directors present by telephone as permitted by the Company’s articles of association] (by telephone)] [[Insert names of any directors present by other means permitted by the Company’s articles of association] (by [insert other means])] [ In attendance: ] [[Insert name of anyone in attendance, who does not count towards the quorum for the Meeting (eg the company secretary, any legal advisers)]] [ Apologies: ] [[Insert names of any directors who are unable to attend the Meeting]] 1 Chair, notice and quorum [Insert name] was appointed...

View the latest UK Parliament Acts documents on Authorised minimum share capital

763 The authorised minimum

(1)     “The authorised minimum”, in relation to the nominal value of a public company's allotted share capital is—(a)     £50,000, or(b)     the prescribed euro equivalent.(2)     The Secretary of State may by order prescribe the amount in euros that is for the time being to be treated as equivalent to the sterling amount of the authorised minimum.(3)     This power may be exercised from time to time as appears to the Secretary of State to be appropriate.(4)     The amount prescribed shall be determined by applying an appropriate spot rate of exchange to the sterling amount and rounding

766 Authorised minimum: application where shares denominated in different currencies etc

(1)     The Secretary of State may make provision by regulations as to the application of the authorised minimum in relation to a public company that—[(a)     has shares denominated—(i)     in more than one currency, or(ii)     in a currency other than sterling or euros,](b)     redenominates the whole or part of its allotted share capital, or(c)     allots new shares.(2)     The regulations may make provision as to the currencies, exchange rates and dates by reference to which it is to be determined whether the nominal value of the company's allotted