How to issue new shares in a limited company (SH01)

What does allotting shares mean?

Allotting shares means the company creates new shares and gives someone the right to be entered in its register of members for them. It increases the company's share capital. The law treats shares as allotted when that person gets the unconditional right to be entered, not when Companies House is told.

People usually call this issuing new shares. The date matters, because the one-month SH01 deadline runs from it. It is often the date of the directors' decision, but it can be later if the allotment depends on something first, such as payment.

SH01 is for shares allotted after the company was set up. GOV.UK describes it as the form to give notice of shares allotted following incorporation. The first shares taken by the people who formed the company are recorded in the incorporation documents instead.

Source: Companies Act 2006, section 558: when shares are allotted

How is issuing new shares different from a share transfer?

Issuing new shares creates shares that did not exist before, so the company's share capital goes up and Companies House must be told on form SH01. A transfer moves shares that already exist from one shareholder to another. Share capital stays the same, a stock transfer form is signed, and Stamp Duty may apply.

GOV.UK says you do not have to pay Stamp Duty if you subscribe to a new issue of shares. For a sale or gift of existing shares, read our guide to the stock transfer form (J30) and stamp duty instead.

Source: Tax when you buy shares: overview

1. Check the articles and the directors' authority

The Companies Act 2006 says directors must not allot shares unless they have authority under section 550 or section 551. A director who knowingly allots without authority commits an offence, although the allotment itself is not made invalid by that alone.

Section 550 covers a private company with only one class of shares. Its directors can allot more shares of that class, unless the company's articles stop them. Many small companies with only ordinary shares rely on this.

In any other case, including where the company has more than one class of shares or wants to create a new class, the directors need authority under section 551. That authority comes from the articles or a resolution of the company. It must state the maximum number of shares that can be allotted and an expiry date no more than five years ahead. An ordinary resolution is enough to give, renew or change it, even though it amends the articles.

Read your articles first either way. They may add their own conditions, such as shareholder consent for any new issue.

Source: Companies Act 2006, section 551: authorisation by company

2. Deal with pre-emption rights

When a company allots ordinary shares, section 561 says it must first offer them to existing ordinary shareholders, in proportion to the shares they already hold. The offer must stay open for at least 14 days. The company can go ahead once that period ends, or sooner if every shareholder has accepted or refused.

There are ways round this. The articles of a private company can exclude the right altogether. A private company with only one class of shares can give its directors power to disapply it, in the articles or by special resolution. Where directors act under a section 551 authority, a special resolution can disapply it for a particular allotment. The right also does not apply where the shares are paid for wholly or partly other than in cash.

Check which of these applies before the directors decide. If you are relying on shareholders turning down the offer, keep their written replies with the company's records.

Source: Companies Act 2006, section 561: existing shareholders' right of pre-emption

3. Agree the terms and make the allotment

The directors decide who gets the new shares, how many, which class and at what price. They usually do this at a board meeting or by a written decision, as the articles allow. Record the decision in the minutes, with the allotment date.

Shares must not be allotted at a discount, so the price must be at least their nominal value. If the shares are issued for more than nominal value, the extra is share premium. Note how much is paid and how much, if any, is unpaid on each share, because the statement of capital needs it.

Source: Companies Act 2006, section 580: shares not to be allotted at a discount

4. File form SH01 within one month

A company limited by shares must send Companies House a return of allotment within one month of making the allotment. GOV.UK says the same: tell Companies House within a month if you issue more shares. You can file it online, or on the paper SH01, which GOV.UK says takes longer to process.

The return must include a statement of capital. This covers the company's whole share capital after the new shares, not just the new shares themselves:

• the total number of shares in the company;
• their total nominal value;
• the total amount unpaid on them, if any, including any unpaid premium;
• for each class, the rights attached, the number of shares and their total nominal value.

Source: Companies Act 2006, section 555: return of allotment by limited company

5. Update the register of members and issue share certificates

The company must enter the allotment in its register of members as soon as practicable, and in any event within two months of the allotment date. The register of members is one of the statutory registers a company still keeps.

Share certificates for the new shares must be completed and ready for delivery within two months of the allotment, unless the conditions of issue say otherwise. Failing to do either is an offence by the officers in default.

Source: Companies Act 2006, section 554: registration of allotment

6. Check whether anyone's PSC details have changed

New shares change everyone's percentage. Someone may cross 25% and become a person with significant control, or an existing PSC may drop below 25% or move into a different ownership band. GOV.UK says PSC changes must be reported to Companies House within 14 days of confirming them.

Work out each person's percentage after the allotment, not before. Our guide to who is a person with significant control explains the bands and the other ways someone can be a PSC.

Source: People with significant control (PSCs)

Is there a Companies House fee for an SH01?

The Companies House fees list, last updated on 25 September 2026, does not include a fee for a return of allotment of shares on form SH01. Fees do apply to some other share changes, such as reducing capital, so check the fees list if you are doing more than a simple allotment.

Missing the one-month deadline is a different matter. Under section 557, failing to deliver the return is an offence by every officer in default, punishable by a fine and a daily default fine while it continues. File on time rather than relying on the next confirmation statement to tidy things up.

Source: Companies House fees

Common mistakes when issuing new shares

Most problems come from skipping a step before the allotment, or forgetting the records afterwards.

• Relying on section 550 to create a new class of shares. It only covers more shares of the company's single existing class.
• Using a section 551 authority that has expired, or that is too small for the number of shares being issued.
• Ignoring pre-emption rights, or giving existing shareholders less than 14 days to accept.
• Counting the month from the wrong date, such as when the SH01 is prepared rather than when the shares were allotted.
• Showing only the new shares on the statement of capital, instead of the company's whole share capital.
• Issuing shares for less than their nominal value.
• Forgetting the register of members, share certificates or a PSC change after the SH01 is filed.
• Using a stock transfer form for new shares, or an SH01 for a transfer of existing shares.

Source: Companies Act 2006, section 555: return of allotment by limited company

Get help filing your SH01

Once your company has allotted the shares, SimpleFilings can prepare the SH01 and statement of capital, check them with you and submit them when you approve. Our £4.99 service fee covers that filing. You can issue new shares with us for a single class allotted for cash on one date; other allotments need a review first. We do not draft resolutions or give legal or tax advice.