Allotment & Issue of Shares

Overview

Use these documents when your company needs to create and issue new shares. This is the standard process for bringing in new cash investment, capitalising a director's loan, or introducing a new business partner.

Because issuing new shares dilutes the percentage ownership of existing shareholders, the Companies Act 2006 requires you to follow a strict order of priority. You generally cannot issue shares without first checking you have the authority to do so and respecting existing pre-emption rights.

Compliance: Before you start

Before using the minutes or resolutions, you must check two things:

1. Authority to Allot (s550/s551): Do the directors have the power to issue shares? In private companies with one class of shares, this is often automatic. If not, you need a shareholder resolution to grant it.
2. Pre-emption Rights (s561): Existing shareholders have a legal right to be offered the new shares first. If you are bringing in a new investor, you must either follow the pre-emption procedure or pass a resolution to "disapply" (waive) these rights.

Document Toolkit

Guidance & Preparation (Start Here) Read these first to understand the legal requirements and ensure you don't miss a step.

• Guidance Notes - Share Capital
• Guidance Note: Issuing & Transferring Shares
• Guidance Note: Fully Paid, Partly Paid & Unpaid Shares
• Issue & Allotment of Shares Checklist

Step 1: Shareholder Permissions Use these if the directors need authority to allot or need to bypass pre-emption rights to bring in a new investor.

• Shareholders’ Ordinary Resolution - Authority To Allot New Shares
• S.569 Disapplication of Pre-emption rights - Special Resolution (private company with one class of shares only)
• S.570 Shareholders’ Special Resolution - Disapplication Of Pre-Emption Rights
• Shareholder Resolutions – Authority to Allot Redeemable Shares
• Deed of Waiver of Pre-emption Rights

Step 2: Board Approval Once authority is established, the directors must hold a board meeting to formally approve the investment and allot the shares.

• Board Minutes – Issue & Allotment of New Shares Approval by Written Resolution
• Board Minutes – Issue & Allotment of New Shares Approval by General Meeting
• Board Minutes – Directors’ Resolution to Allot Shares for Cash

Step 3: Letters & Applications The paper trail between the company and the investor (the offer and acceptance of the shares).

• Invitation to Apply for New Shares
• Letter of Application for New Shares
• Confirmation of Share Allotment

Step 4: Filing & Reporting You must report the new shares to Companies House within one month using Form SH01.

• CHF - SH01 - Return Of Allotment Of Shares
• Letter to Companies House – Filing Resolutions

• Guidance Notes - Share Capital
• Guidance Note: Issuing & Transferring Shares
• Guidance Note: Fully Paid, Partly Paid & Unpaid Shares
• Issue & Allotment of Shares Checklist
• Shareholders’ Ordinary Resolution - Authority To Allot New Shares
• S.570 Shareholders’ Special Resolution - Disapplication Of Pre-Emption Rights
• S.569 Disapplication of Pre-emption rights - Special Resolution (private company with one class of shares only)
• Shareholder Resolutions – Authority to Allot Redeemable Shares
• Board Minutes – Issue & Allotment of New Shares Approval by Written Resolution
• Board Minutes – Directors’ Resolution to Allot Shares for Cash
• Board Minutes – Issue & Allotment of New Shares Approval by General Meeting
• Invitation to Apply for New Shares
• Letter to Companies House – Filing Resolutions
• Letter of Application for New Shares
• Confirmation of Share Allotment
• Deed of Waiver of Pre-emption Rights
• CHF - SH01 - Return Of Allotment Of Shares

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