How Do I Issue Shares In My Company? Share Issues in a small private Limited Company

This article was last updated 0 months ago and may not represent current law.

This blog will look at the question of ‘How do I issue new shares in my company’ but before we get there, let’s have a quick recap on shares.

Shares in a private limited company have the three following features:

1. They deal with voting rights - they can either be voting or non-voting
2. They deal with dividend rights - they can entitle the holder to a share of profits or not
3. They deal with share of capital - they can entitle the holder to a share of the business on sale or other disposal, or not.

Sometimes called Alphabet Shares, this is where shareholders have e.g A Shares, B Shares and C Shares, usually so that dividends can be paid in different amounts to different shareholders.

There are also things like Preferential Shares, which are special shares which, on a sale, disposal or liquidation, ensure that shareholder is paid out before the other shareholders (that is, they are preferred).

And of course, it may be that you are looking at other more complex derivatives of shares, such as Freezer Shares, Growth Shares, Hurdle Shares, Flowering Shares, and all other strangely named shares outside of this particular article.

So what happens if a company wants or needs to issue new shares, eg to a new investor or to an employee (by the way, read our blog on what to do if you’re considering giving shares away).

The Directors of a Company cannot issue or allot shares unless they have authority. If the company is a private company with only one class of shares, the directors already have that authority under section 550 of the Companies Act 2006, unless the articles say otherwise. In other cases (for example, where there is or will be more than one class of shares) the directors need authority either in the articles or from the Shareholders by way of an ordinary resolution under section 551.

The existing shareholders will also usually have a right of first refusal (called pre-emption rights) when new ordinary shares are issued for cash. If the new shares are going to someone else, those rights need to be disapplied by a special resolution, unless the articles already exclude them.

Once any resolutions that are needed have been passed, the directors can then issue and allot the new shares.

If there is going to be a different class of shares, it is sensible to consider whether new articles are required, or whether a shareholders agreement may be necessary to regulate things. For example, if they are being given to an employee, you may want to retain some control over the shares. However, if they are to a new investor, then there may be different thinking going on.

Let’s say you just want to issue some more of the same shares you have, that your new investor is going to be on an equal footing to you, here’s what you’d do:

1. Have a shareholders/members meeting to discuss and approve any resolutions that are needed, which will be an Ordinary Resolution to authorise the directors to issue and allot the shares (if they don't already have authority) and a Special Resolution to disapply pre-emption rights (if the shares aren't being offered to the existing shareholders first).
2. Hold a directors meeting to approve the issue and allotment of the new shares.
3. Agree how and when the shares will be paid for (the articles may require them to be fully paid).
4. Issue the new shareholder with a share certificate.
5. Update the company's register of members. Every company must keep its own, as the option to keep it at Companies House ended on 26 January 2026.
6. File Form SH01 at Companies House to confirm the new shareholding.

The more complicated part is certainly understanding whether you need new articles of association or a shareholders agreement.  The answer is probably yes - see Do I Need A Shareholders Agreement? But if you’re unsure, get in touch.

Issuing and allotment of new shares is relatively painless and not expensive to do. But it is important to ensure that everything has been considered before going ahead so do get in touch before going ahead.

Written by Steven Mather, a business solicitor acting on company sales and purchases. This is general information about the law, not legal advice on your situation. Law correct as at 7 October 2026.