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What is a Confirmation Statement?

Limited companies and Limited Liability Partnerships (LLPs) submit confirmation statements to make sure their details at Companies House are correct and up to date. In this article we explain what information you need for your confirmation statement, how to submit it, and the deadline for sending one.

What is the purpose of a confirmation statement?

In essence, the confirmation statement is just that – it’s a statement which confirms the information Companies House has for your business is accurate. It’s not meant to be a way of reporting any changes in your company (which is a separate process).

Your confirmation statement must also include an email address which Companies House will use to contact you (although your email will not be shared on the public register).

What’s the difference between an annual return and a confirmation statement?

Confirmation statements have actually replaced the old-style annual return, though they do pretty much the same job. The newer confirmation statement also includes space to record information about ‘People with Significant Control’ (PSCs). This information identifies the people involved in the management and ownership of a company, and will be made publicly available on the Companies House register.

Registering a Person with Significant Control

It’s essential this information is reviewed regularly and always kept up to date, including:

It is also important to explain their position and standing in the organisation, and outline why they should be included as a Person with Significant Control (PSC).

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Do all businesses need to complete a confirmation statement?

All UK limited companies and Limited Liability Partnerships (LLPs) must file a confirmation statement even if the company or partnership is dormant.

When is my confirmation statement due?

You’ll need to submit a confirmation statement to Companies House at least once every 12 months, but filing can take place any time during your review period.

The review period for new companies that haven’t filed a confirmation statement before begins at the company’s incorporation date and finishes 12 months later.

For example

If a company is incorporated on 1st January, the review period ends on 31st December.

For more established companies which have already filed at least one confirmation statement before, the review period begins the day after your last confirmation statement was submitted and then ends 12 months later. You can send your confirmation statement early if you want to, which resets the clock so the review period ends 12 months afterwards. You can check upcoming reporting deadlines in Client Hub if you’re our client.

Use our interactive calendar to estimate your reporting deadlines

What if I don’t have any changes to report?

If nothing has changed since your last confirmation statement, then you don’t need to submit anything new and can simply ‘check and confirm’ the existing information held on public record.

What if my confirmation statement is filed late?

You must file your confirmation statement within 14 days of your review period ending. Don’t risk prosecution or being stuck off the register – file on time!

If you’re worried about missing the deadline to file your confirmation statement, it’s worth signing up for the Companies House email reminder service. It’s free to use and up to four people can receive a reminder. To make it even easier, you can also submit your statement using the link contained in the email. Sign up here.

How do I submit a confirmation statement?

The Companies House online service is the quickest and easiest way to complete your confirmation statement. Using this method also means most of the information on the form will be pre-populated, so you only need to check the details and edit any changes, rather than start from scratch.

If you would like to update any of the information Companies House holds for your company, you can do this in the ‘additional information’ section of the form online. It can be used for updating your:

You can check what information Companies House already has about your company using the Companies House service.

Is there a fee for filing a confirmation statement?

It costs £50 to file a confirmation statement online in any 12-month period. You’ll only ever pay the £50 fee once in a year, so filing another one in the same period won’t result in an extra charge. If you do decide to file a paper submission, the charge jumps to £110. It’s also more laborious without any of it being pre-populated – plus the trip to the post box!

Who is responsible for completing the confirmation statement?

Larger or publicly owned companies often have a company secretary who will file the confirmation statement on the company’s behalf.

If your company doesn’t have a secretary then any of the directors or another designated company member can file it instead.

In a Limited Liability Partnership (LLP) you’ll normally have a ‘nominated partner’ who takes care of the paperwork, but all of the partners share responsibility.

The most important thing is to file the statement with Companies House on time every year. Our short video explains about the obligations you have as the director of a limited company.

Filing your confirmation statement is a legal obligation and is not optional. There are serious consequences for directors, including fines and prosecution, if it’s not done. Failure to submit the statement on time might also cause the registrar to remove it from the company register. Remember, your accountant may file on your behalf – but it’s still ultimately your responsibility.

If you need guidance on any aspect of your company’s confirmation statement, we’re here to help! Get in touch to find out more about our wide range of online accounting services. You can also call 020 3355 4047, and get an instant online quote.

How Do I Sell My Limited Company?

People sell their limited companies for all sorts of reasons. They might be looking to retire from self-employment, have hit hard times, or want to sell it for a profit.

Like most aspects of registering and running a business, selling your UK limited company usually means no shortage of paperwork. It’s well worth taking a step back to think about your exit strategy and how you plan to get the business ready for sale. A bit like selling a house, you want the best possible price with the least amount of fuss – so in this article we’ll explain how it’s done.

Step-by-step process for selling a UK company

Going through all the checks and processes of selling a company can be quite confusing. There are usually several stages, including:

What do you want to achieve from the sale?

A ‘successful sale’ will be very different from one person to the next, so it’s up to you to decide what you’re aiming for by selling. This might depend on:

Considering these could have a big impact on the way you approach and structure the sale!

Can I stay on as a director or shareholder after I sell my company?

This largely depends on the agreement you make with the new owner. Continuing to be a director for a set period of time after the sale is fairly common practice, and can make the handover smoother. It also reduces risk for the new owner by giving staff, suppliers, and clients a sense of security and continuity.

Decide what’s included in the sale

Selling the shares which show who owns a company is one thing, but there might also be company assets to consider, such as equipment, furniture, cash, inventory, and goodwill (which is the value of your brand and how people perceive it). And then there might also be patents, copyright, or Intellectual Property which the company owns, or which you own but which relates to the company.

You might decide to sell some of the company’s assets separately to the shares, or simply bundle them all up together. It’s entirely up to you, so a letter of intent can help the potential buyer understand what’s on offer before working towards a more formal final agreement.

Can I just sell part of my limited company if I want to?

Yes, you can, and this is quite common in companies which want to sell shares in order to raise funds. Just be aware that selling part of your company can mean you have less control depending on the type of shares you sell, or the agreement you have with the buyer. It’s best practice to draw up a formal shareholders’ agreement, to help avoid future complications or disputes.

It’s also worth keeping in mind that shares are considered to be assets, so selling them for a profit means you’ve made a ‘capital gain’ and need to pay Capital Gains Tax.

Transferring liabilities in a company sale

Most companies have liabilities, such as credit cards, tax, loans, or even staff wages to be paid. They’ll generally be transferred to the new owner when the company’s sold, but the buyer will obviously be very keen to understand the extent of the liabilities before they commit to anything, so prepare for lots of questions!

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Preparing documents

As well as preparing your sales pitch, you’ll need your company’s financial reports and forecasts. Any potential buyer is going to ask a lot of questions, so you’ll be able to pre-empt a lot of these.

Valuing the company

Make sure you appraise each asset individually, so you know their individual value and the overall value of your business. This then shows you what your business is worth in total.

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Do I need permission or can I sell my company to anyone?

Yes, in theory you can sell your company to anyone you like, but there might be restrictions relating to national security laws, the potential buyer, and even your own company rules.

Doing due diligence checks on potential buyers

If you’re selling a car or games console, then you’ll probably just hand it over to whoever comes along with the right amount of money. Unfortunately, selling your company isn’t so straightforward!

You must not sell or transfer ownership of your company to anyone on the UK Sanctions List or an equivalent database.

It’s a very serious offence to transfer ownership of a company to someone who is sanctioned by the UK government. This includes anyone with a connection to someone on the list too, so it’s essential that you know:

National security

Companies dealing in particularly sensitive industries will usually need to notify the government and ask permission before they can sell to someone else – even if they’re only selling a stake in the business.

This tends to apply to companies with contracts relating to defence, advanced technology, or infrastructure which is critical to the function and safety of the UK. Check which areas are affected by the National Security and Investment (NSI) Act.

Checking any other existing agreements

It’s well worth checking the terms of any funding or loan agreements you currently have in place in case they prevent a sale. Some of them can be very strict, so try to do this before getting too far.

Your own company’s rules

If you’re the only shareholder and director in the company, then you can pretty much sell it without consulting anyone else – as long as the other rules around sanctions and security are met.

If there are other shareholders, then the company isn’t entirely yours to sell. Ownership will be shared between you depending on how many shares you each own, and what type they are.

You’ll need to take a look over your shareholders’ agreement and check the company’s articles of association for any provisions you must make. The other shareholders will normally need to agree to the sale.

Selling just your own shares

You can still sell your own shares if you want to but again, just make sure there isn’t anything in the shareholder’s agreement or the company’s articles of association which restricts this.

In some companies the other shareholders have pre-emption rights which they need to waive for the sale to go ahead. Pre-emption rights protect shareholders by giving them the power to prevent a sale to a buyer they don’t want to be in business with.

Negotiations

There isn’t a set formula for negotiating the sale of a company, so the way you approach this very much depends on what you’re willing to accept. Some general points to consider might include:

Paying tax after you sell your business

The way you pay tax can partly depend on what you’re selling and who actually owned it.

Companies are a legal entity in their own right, so selling any assets it owns means the company will pay Corporation Tax on any profit it makes.

Selling your own shares is a separate process; the buyer will take ownership of the company, but the company still owns all its assets. You, as the individual who makes a gain from transferring your shares to someone else, will pay Capital Gains Tax on the profit.

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You might be able to claim Business Asset Disposal Relief to reduce the tax you owe after selling your shares.

Learn more about paying tax after selling your business

Who do I need to tell if I sell my limited company?

You’ll need to tell everyone who has a connection to the company, from customers with outstanding work, to suppliers, staff, and beyond. You must also make sure that you carry out your statutory reporting obligations, and let Companies House and HMRC know!

Telling Companies House about the sale of your company

You’ll need to let Companies House know if you sell your company or make any other significant changes to it. There isn’t a single process to report the sale, so you’ll need to go through each administrative change separately:

Selling your company and HMRC

There are a few factors for HMRC; the company’s own tax affairs, as well as your own and the buyer’s.

Could I make my company dormant instead?

If you don’t want to operate your company right now, you can make it dormant instead. This means it will still exist legally, but won’t be trading. Tax-wise, you’ll need to tell HMRC your company is dormant and confirm it’s not taking in any income from trade.

Even once dormant, you’ll still need to submit annual accounts and a confirmation statement to Companies House. It’s a bit different from a company which is simply not trading.

How long does it take to sell a limited company in the UK?

How long is a piece of string? Company and sector appeal, location, revenue, cash flow, time, and even sheer good luck all play their part. It’s about how comprehensively you prepare your company for sale, too.

You might be able to speed up the process by being as transparent as possible, right from the start, but just be wary of giving away sensitive information – especially before getting any non-disclosure agreements in place.

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Selling Shares to Raise Funds in a Private Limited Company

Limited companies sometimes sell shares as a way of raising funds for the business. Known as equity finance, one of the advantages is that you won’t need to pay interest or make repayments on it like you would with a bank loan or an overdraft. There are other considerations though, so in this article we’ll go over the legal process, and what impact this might have on your company.

Why buy shares in a private company?

When a person has shares in a company they own part, or a ‘share’, of it. One of the perks of being a shareholder is that you’re normally entitled to receive dividend payments (although you’ll need to declare these and pay dividend tax on your income!).

Dividends are paid from the profits that a company makes, so if the company does well and makes lots of profit, the shareholders can expect a larger payment. Some people deliberately invest in new or smaller companies they suspect will perform well, buying shares in the business whilst its small, and then earning healthy dividends as it grows.

It isn’t always that straightforward though, because the company isn’t allowed to make dividend payments to its shareholders if it fails to make a profit. Some shareholders might be ok with this for a short while but they might not make any money, or even get their original investment back, if the company doesn’t get going, so there is an element of risk involved.

Who can buy shares in a private limited company?

Almost anyone can buy company shares, though the shareholders in most private limited companies are people involved in the business, or their friends and family.

If you want to use company shares as a way to raise money though, you might sell them to private individuals, or make a more formal equity funding agreement with a venture capital firm or a business angel.

Business angels are people or organisations who invest in businesses, but who might not otherwise have a connection to it.

Do I have to sell my own shares to raise funding?

No, you won’t need to sell your own existing shares to someone else if you don’t want to. This partly depends on whether you’re raising money for yourself or for the company though!

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Can I sell different types of shares to different shareholders?

Yes, companies can issue different types of shares, as well as different classes of shares. Hold on to your hats, because this can get a bit confusing!

Issuing a variety of shares can help a limited company be more flexible with what its shareholders are entitled to. For instance, you might want to pay one group of shareholders dividends at a higher rate than another group, or restrict what decisions some of your shareholders are allowed to make.

Different share classes

Share classes are sometimes referred to as alphabet shares because they tend to be recorded in the company’s records as ‘A’ shares, ‘B’ shares, ‘C’ shares… and so on. Limited companies issue alphabet shares because it allows them to give their shareholders different rights.

For example, you could set up your share structure so that Ordinary ‘A’ shares entitle the shareholder to a percentage of the profits for each share they own but no voting rights, whilst Ordinary ‘B’ shares permits voting rights, but without receiving dividends.

The company can decide what share structure it wants to use, which can be particularly useful if you want to issue shares which you then sell to investors in order to raise money for the company’s next project!

Learn more about paying different dividends to shareholders

What happens when shares are sold?

There are a few reporting requirements to take care of after selling or transferring shares to someone else, including letting Companies House and HMRC know.

Learn more about our online accounting services for businesses. Call 020 3355 4047 to chat to the team, and get an instant online quote.

What’s the Difference Between an LLP and a Limited Company?

If you’re starting a business then choosing the right legal structure can be confusing. There are pros and cons to each, and what works for one business might not be a good fit for another.

If you’re looking at setting up a business which limits your own personal liability then you might consider either setting up a limited company or registering a Limited Liability Partnership. In this article we explain who might find each structure most useful, along with the differences in how they’re taxed, registered, and operated.

Personal liability for limited companies and LLPs

Private limited companies get this name because they ‘limit’ the amount of personal responsibility the owners and directors have for any business debts to the value of their investments in or guarantees to the company.

LLPs are similar because they also reduce each partner’s personal liability, so partners aren’t responsible for each other’s conduct (or negligence). The partners – also known as Members – will guarantee how much they must pay if the business runs into problems, and record it in the partnership agreement.

Tax in a limited company versus in an LLP

One of the key differences between limited companies and LLPs is the treatment of tax; limited companies pay tax as an entity, but LLPs don’t.

How a limited company is taxed

A limited company is completely separate from the people in the business, so for tax this means:

How LLPs are taxed

An LLP as an entity isn’t taxable, but the members are, so they’ll pay tax on their share of the LLP’s profits even if they’re not distributed and stay in the business.

Setting up the business

Both limited companies and LLPs need to register with Companies House, and both pay the same incorporation fees – but they do have different requirements for how many people are involved.

LLPs must have at least two partners, but there’s no maximum on how many you can have (and you could always set up a dormant limited company and use that as the second member in your LLP).

Private limited companies can be incorporated by a single person who is both the only director and only shareholder.

We have separate guides which go into more detail about registering each business type:

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Public information and protecting privacy in companies and LLPs

Registering with Companies House means information about who owns and runs a company or LLP is available on the public register, along with the business’s annual accounts and confirmation statements.

LLPs are sometimes seen as being slightly more private than limited companies because they don’t need to share the partnership or member agreement with Companies House. The equivalent document in a limited company (known as its Articles of Association) must be placed on public record.

Roles, responsibilities, and admin

Many of the reporting requirements and obligations are similar between LLPs and limited companies. As a member or director you may need to:

Comparing companies and LLPs – at a glance

LLP Limited Company
Ownership You need at least two partners, who generally have equal shares. Can be owned by one person who is both the only director and shareholder.
Management Partners must vote on important issues but in general works the same as a limited company. Shareholders might need to vote on important issues, but most day-to-day management is dealt with by the directors.
Liability Limited to what the partners guarantee they will pay in if the partnership has issues. Limited to what the owners invest in the business.
Privacy Details such as the registered address, owners and key individuals, annual accounts, and confirmation statements are all available on public record.

An LLP’s partnership agreement can be kept private.

 Details such as the registered address, owners and key individuals, annual accounts, and confirmation statements are all available on public record.

A company’s articles of association must be published on Companies House.
Admin and reporting Must submit accounts and confirmation statement annually to Companies House and an SA800 Partnership Tax Return to HMRC. Annual accounts and confirmation statement needed for Companies House and a CT600 Company Tax Return for HMRC.
Tax The business isn’t taxed, but the members are (whether or not the LLP distributes the funds). The business pays tax on its profits, and members only pay tax on what they take out of the company.
Inward investment Partnerships don’t have any shares to sell, so any investment coming in after forming the partnership might require changes to the partnership agreement. Relatively simple. The company can sell or issue shares to raise money for the business.
Sale and exit There aren’t any shares, but partners can ‘sell’ their rights back to the LLP. It’s easier to sell through a share sale, and often seen as more attractive.

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Is It Cheaper to Be a Sole Trader or Limited Company?

Factors such as how much you earn, and the industry you operate in are all at play when considering what type of structure is cheaper and whether you should be a sole trader or a limited company.

For some business owners, staying a sole trader is the simpler, cheaper option. For others, especially as profits grow, switching to a limited company can save real money because of the extra options for tax efficiency – becoming the natural next step.

Below, we’ll break down the costs of each structure and where the numbers tend to tip in one direction or the other, so you can see where you’d likely land.

What’s the difference between a sole trader and a limited company?

In legal terms a sole trader is the business, whilst if you run a limited company, you’re separate because the company is a different legal entity to you as the human person who owns it. This affects how you operate, your liability if things go wrong, and the taxes you pay.

For example, because a sole trader is the business itself, with no legal distinction, they pay Income Tax and National Insurance on their profits (even if they don’t actually take them out of the business for themselves).

A limited company, on the other hand, must submit a Company Tax Return each year, and pay Corporation Tax on its profits. You, as the owner, will only pay Income Tax and NI on the money you take from the business for yourself, but any profits left over still belong to the company, so you can’t just take them out freely like you could if you were a sole trader.

Instead, profits need to be taken out through the likes of dividends or by taking a salary – lots of limited company directors will pay themselves a mix of the two for tax-efficient purposes.

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The cost of being a sole trader

Being a sole trader is common for freelancers and side-hustlers – usually because the tax reporting requirements are simpler and due to how cost-effective it is. Below are the costs you’d typical be expected to pay when operating as a sole trader.

Registration and legal fees

You can register to become a sole trader for free through the gov.uk website.

Income Tax and National Insurance

As a sole trader, you’ll pay Income Tax and National Insurance (Class 2 and 4) on your profit – that’s your turnover minus whatever you’ve legitimately spent running the business. Not on everything you bring in, just what’s left over.

Business insurance

Here’s the bit people don’t always think about – as a sole trader, there’s no legal separation between you and your business. If something goes wrong, your personal stuff, like your house, your car, your savings, could be on the line.

That’s why Public Liability or Professional Indemnity Insurance is worth budgeting for. It’s an extra cost, but it’s the kind of cost that earns its keep.

VAT

Once your turnover passes £90,000 a year, you have to register for VAT. That means more paperwork and more to stay on top of, so it’s worth knowing where that threshold sits even if you’re nowhere near it yet.

Accountancy fees

Setting up as a sole trader doesn’t cost a penny – but most people bring in an accountant to handle bookkeeping and their Self Assessment at year-end. Expect to pay somewhere between £150 and £600+ a year, depending on how complicated your finances are.

Equipment and tech

This one varies massively. For example, you could be a freelance writer who only needs a laptop and mobile phone, or you might be a tradesperson and need things like tools, protective gear, and even a van.

Marketing

A website, hosting, some advertising, a bit of branding – none of it’s optional if you want a steady stream of clients coming in. You may even hire someone to do this for you – which is ideal if you’re busy and unsure on how to get your business out there!

Expenses you can claim as a sole trader

We’ve mentioned things like equipment and tech – as well as marketing costs. All of which pile up – but the good news is anything you spend ‘wholly and exclusively’ for your business can be typically claimed back as an allowable business expense.

This basically means the cost of it is deducted off your profit – reducing the income tax you owe to HMRC. This covers things like rent on a business premises, utility bills, business insurance, the business share of your phone and internet, and accountancy or legal fees.

Learn more about claiming business expenses as a self-employed sole trader.

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The cost of setting up and running a limited company

Whilst being a sole trader is cheaper in terms of set-up costs, running a limited company could save you more money in tax depending on how much you earn. We’ll go over what you might typically expect to pay when running one.

Registration fees

How much you pay to set up your limited company depends on how you do it. You have a few options:

Corporation Tax

Unlike sole traders, limited companies don’t pay Income Tax on their profits – they pay Corporation Tax instead.

For 2026/27, that’s 19% on profits up to £50,000, rising to 25% on profits over £250,000, with marginal relief tapering the rate for anything in between.

It’s worth getting your head around early, since this is the rate that does most of the heavy lifting when people talk about limited companies being ‘tax efficient’ because the rates are lower than Income Tax.

VAT

The rules here work the same as for sole traders – once your company’s turnover passes £90,000 in a 12-month period, you’re required to register for VAT. From that point, you’ll need to charge VAT on your sales, file VAT returns (usually quarterly), and keep digital records under Making Tax Digital.

Confirmation statements and annual accounts

These are running costs limited companies cannot skip.

Additional costs

These are the type of costs that are up to you – but well worth considering.

Expenses you can claim as a limited company

The principle is still the same as a sole trader where anything you claim needs to be ‘wholly and exclusively’ for business purposes – but claiming expenses as a limited company is a little different in some cases (and stricter) – for example for working from home or for mileage.

Find out the expenses you can claim as a limited company here

What’s cheaper: A sole trader or a limited company?

Starting out, sole trader wins hands down – it’s quicker, simpler, and costs next to nothing to get going. But if your profits start creeping up or if you have multiple sources of income then a limited company can start to pull ahead.

It mostly comes down to tax, which we’ve covered above – but it’s also about how much admin you’re willing to take on and, as the director, you’ve then got more room to be clever about how you take money out: a small salary plus dividends usually works out better than taking a salary alone, since dividends are taxed at a lower rate than income, and the salary itself reduces the company’s tax bill too.

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The catch? All that flexibility comes with more admin. Limited companies mean stricter filing deadlines, more paperwork, and higher accountancy fees. So, if your income’s a bit up-and-down or hard to predict, staying a sole trader might still be the cheaper option once you factor all that in.

And if your business carries real risk – a trade where things can go wrong in a way which might impact your ability to pay bills – the liability protection alone might tip the decision in favour of a limited company, even if the business doesn’t earn as much.

Honestly, the best move is to get an accountant to run your actual numbers. They’ll be able to tell you the point where switching starts to pay off for you.

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How and When Are Shares Created?

When you run your own limited company, you’re legally separate from it, so rather than ‘being’ the business like a sole trader, you ‘own’ it. This means you’re a shareholder, literally holding a share of the business.

If you’re new to this (and even when you’re not!) it can all seem pretty confusing, so we’ll go through the process of what shares are, why companies use them, and how to create them.

What are shares?

As the name suggests, company shares are really just that – a share of the company. Each share represents a portion of ownership, so if you own all of the shares, you own all of the business. Someone who owns a share is called a shareholder.

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Why do businesses allocate shares?

Mainly because they have to! When you set up a limited company you must allot shares to show who owns it and what each shareholder is entitled to, even if it’s just yourself. Allotting shares is useful though, because it’s another tool for raising money.

Using shares to show who’s in charge and what they’re entitled to

Shares tend to include a right to:

This is quite a general overview though, because companies can create different types and classes of shares if they want to be more flexible with what each shareholder gets as a result of owning them.

Allocating shares can help you raise money for your business

Think of Dragons’ Den! Business owners will go on the show with a thriving business or a potential idea, and offer up a chunk of the company in exchange for the financial investment they need. They’re essentially selling shares in the business to raise funds.

Running a business is tough, so selling shares whilst also bringing other people on board can be an opportunity to fund investment and gain expert advice. In exchange, your investor will normally receive a share of the company’s profits – known as dividends. It does mean the profits aren’t completely yours, but you may decide it’s worth considering if it means the profits are much larger!

How do I create my initial shares?

You’ll need to provide the details of each shareholder and what type of shares they own when you first register your company with Companies House, so this process happens during the initial set up stage. Known as a ‘statement of capital’ it includes:

For example, a company with 20 shares at £1 each has a share capital of £20. Your share capital is not linked to how much your company is worth.

Record what shareholders are entitled to

You’ll also need to record what your shareholders are entitled to. If you only create one type of ordinary share this is quite straightforward, but it’s particularly important if you create different types (sometimes known as classes) of shares, with varying rights.

This information should be made available in the company’s Articles of Association (the written rules you create which set out how to run the company). It will include:

How do I add a new shareholder?

You can add a new shareholder at any time, either by selling or transferring your existing ones, or by allotting (issuing) brand new ones. If you want to add a new shareholder there are steps to follow:

Phew! It can be a lot to take in, and it’s always worth chatting with your accountant before making any major changes to your company structure.

Who can I give shares to?

Anyone you like! You can issue shares from your limited company to an individual, another company, and even family members – including children. It’s useful to think about what happens to company shares in different situtations, and plan for this in the company’s articles of association. For example, what happens if:

Can my limited company have multiple shareholders?

Yes! When you set up your limited company, you’ll need to appoint one director and one shareholder. You can, if you don’t have anyone else in your business yet, take on both roles yourself, and name other shareholders in the future if you want to.

Can I own shares in multiple companies?

You can have shares in various companies, but it’s definitely a good idea to discuss any potential investments with your accountant first so you can be as tax efficient as possible, especially if you own a company you run yourself.

How do I remove or update a company shareholder?

If a shareholder wants to leave your company, you’ll need to tell Companies House next time you file your annual return.

Some companies include a clause in the shareholder’s agreement which sets out what shareholders can do with their shares. This might limit a shareholder to only selling or returning their shares to the company or to another existing shareholder.

It can be quite useful, particularly in smaller companies who might want to restrict who else has a say in what happens to the business. Without it, a shareholder might be able to sell or give their shares away however they please.

We understand shares can be tricky to get to grips with, so always speak to your accountant when you need help. Call 020 3355 4047 or get an instant quote online.