Share Consolidation & Sub-Division Templates
Sometimes a company may need to consolidate or sub-divide its share capital. This alters the number of shares in issue and their nominal value, without changing the total amount of share capital.
- A consolidation creates fewer shares with a higher nominal value.
- A sub-division creates more shares with a lower nominal value.
Because the nominal value of a share is registered at Companies House, any change to that nominal value must follow the procedure in section 618 of the Companies Act 2006.
This section brings together a practical guidance note and the core board, shareholder and Companies House templates needed to implement a share consolidation or sub-division.
When to Use These Templates
Best for:
- Increasing or decreasing the number of shares while keeping total share capital the same.
- Bringing nominal values into line with market practice or simplifying the share structure.
- Preparing for an investment, reorganisation or buyback where the number or value of shares needs to be adjusted.
What This Section Covers
- A practical guide to why and how a company might consolidate or sub-divide its shares.
- Board minutes recording the directors’ decision to proceed and to recommend the change to shareholders.
- A shareholders’ ordinary resolution approving the consolidation or sub-division.
- Companies House form SH02 to record the consolidation or sub-division of shares
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Frequently Asked Questions
What is the difference between consolidating and sub-dividing shares?
Both change the number and nominal value of shares without changing total share capital. A consolidation combines shares into fewer shares of a higher nominal value (200 shares of £1 become 100 shares of £2). A sub-division, often called a share split, divides shares into more shares of a smaller nominal value (one £1 share becomes ten 10p shares). Shareholders' percentage stakes are unchanged. This section's guidance note and templates cover both, and one resolution can authorise both at once.
What approval do we need to consolidate or sub-divide shares?
An ordinary resolution of the shareholders is normally sufficient, since the Companies Act does not specify a resolution type, provided the articles do not prohibit the change or require a higher majority, so check the articles first. In practice the board meets to recommend the change and convene the approval, then the members pass the resolution at a general meeting or by written resolution. The board minutes and shareholders' ordinary resolution templates in this section record each step.
What do we file at Companies House after the change?
Form SH02 (notice of consolidation, sub-division, redemption of shares or re-conversion of stock), including a statement of capital reflecting the new share structure, within one month of the change taking effect. Update the register of members with the new numbers and nominal values and issue replacement share certificates. This section includes the SH02 alongside the board minutes and ordinary resolution that precede it.
Why would we sub-divide our shares?
Usually to make the share structure more flexible: smaller nominal values allow finer percentage stakes for incoming investors or employees, bring nominal values into line with market practice ahead of an investment round, or prepare for a reorganisation or buyback where specific numbers of shares need to change hands. A consolidation works the other way, simplifying an unwieldy structure. The guidance note in this section covers the why as well as the how.