How do I issue new shares in a UK company?
By SuLe · Updated 4 July 2026
To issue (allot) new shares you check you have authority to allot, deal with existing shareholders' pre-emption rights, pass the necessary board and shareholder resolutions, then allot the shares and update your registers. Finally you file the SH01 at Companies House within one month and issue share certificates within two. Each step has a statutory basis in the Companies Act 2006.
Key facts
- Directors of a private company with one class of shares can allot more of that class without shareholder authority (Companies Act 2006 s.550).
- With more than one class of shares, shareholder authority to allot is needed under s.551, by ordinary resolution.
- Section 561 gives existing shareholders pre-emption rights — first refusal on new shares for cash — which must be waived or disapplied.
- The SH01 return of allotment must be filed within one month of allotment; share certificates within two months.
- The register of members, not Companies House, is the definitive legal record of ownership.
Do I have authority to allot the shares?
Start here, because the answer depends on your share structure. Directors of a private company with a single class of shares can allot more of that same class without any shareholder authority, under Companies Act 2006 s.550.
The moment there is more than one class — the typical position once a round introduces preference shares — that shortcut falls away. You then need shareholder authority under s.551, granted by ordinary resolution (over 50% of votes).
So a simple issue of ordinary shares to an existing single class is straightforward, while a priced round creating a new class needs both s.551 authority and, usually, new articles to define the new share rights.
How do pre-emption rights fit in?
Before you can allot to a new investor, you have to reckon with the existing shareholders. Section 561 gives them statutory pre-emption rights — first refusal on new shares issued for cash, in proportion to their current holdings.
Unless these rights are disapplied, you must offer the shares round the existing shareholders first. That is dealt with either by a one-off disapplication by special resolution (75%), or by a standing disapplication built into the articles under ss.569–571.
In practice most rounds handle it with a short disapplication and waivers signed at completion, so the new investor gets the exact shares agreed. Skip this step and the allotment can be challenged.
What are the mechanical steps and filings?
Once authority and pre-emption are sorted, the mechanics are procedural. The board resolves to allot the shares (conditional on the money arriving), the investor pays, and the shares are allotted.
You then write up the register of members to show the new holdings. This internal register — not the Companies House record — is the definitive legal proof of ownership, so getting it right matters more than the public filing.
Finally come the filings and certificates. File the SH01 return of allotment within one month; file any special resolutions and amended articles within 15 days; and issue share certificates to investors within two months of allotment.
| Step | Basis / deadline |
|---|---|
| Check allotment authority | s.550 (one class) or s.551 (ordinary resolution) |
| Deal with pre-emption | s.561; disapply by special resolution or articles (ss.569–571) |
| Board resolves to allot | Board minutes |
| Update register of members | Definitive record of ownership |
| File SH01 | Within 1 month of allotment |
| File special resolutions / articles | Within 15 days |
| Issue share certificates | Within 2 months of allotment |
Worked example
Leah runs Brightloom Ltd, an edtech startup with a single class of 100,000 ordinary shares held by two founders. An angel agrees to invest £120,000 for 20,000 new ordinary shares.
Because there is only one class, Leah's board can allot under s.550 without a shareholder vote — but the two founders still hold s.561 pre-emption rights, so they sign short waivers. The board allots the 20,000 shares once the £120,000 lands, the register of members is updated to 120,000 shares in issue, the SH01 is filed two weeks later, and the angel's certificate is issued within two months. A clean, correctly sequenced allotment.
Where founders go wrong
Assuming directors can always allot freely
— that only holds for a single class under s.550; a new share class needs s.551 authority by ordinary resolution.Forgetting pre-emption
— s.561 gives existing shareholders first refusal on new shares for cash, and an allotment ignoring it can be challenged.Treating Companies House as the ownership record
— the internal register of members is the definitive legal proof; keep it accurate and up to date.Missing the SH01 or certificate deadlines
— the return of allotment is due within one month and certificates within two; both are easy to overlook in the rush after completion.
Related questions
Do I need shareholder approval to issue new shares?
Sometimes. Directors of a private company with a single class of shares can allot more of that class without shareholder authority under Companies Act 2006 s.550. If there is more than one class — for example when a round creates preference shares — you need shareholder authority under s.551, given by ordinary resolution. [More: What board and shareholder resolutions does a funding round need?]
What are pre-emption rights and do they apply?
Section 561 gives existing shareholders first refusal on new shares issued for cash, in proportion to their holdings. Unless these rights are disapplied — by special resolution or in the articles — you must offer the shares round first. Most funding rounds deal with this by a disapplication before allotment. [More: What are pre-emption rights — and how are they disapplied?]
What do I have to file at Companies House?
The SH01 return of allotment within one month of allotment. Any special resolutions and amended articles go in within 15 days. You must also update the register of members, which is the definitive legal record of ownership, and issue share certificates within two months of allotment. [More: What is an SH01 and when must I file it?]
Is the Companies House record proof that someone owns shares?
No. The register of members kept by the company — not the Companies House filing — is the definitive legal record of who owns shares. Companies House is notified via the SH01 and the confirmation statement, but the internal register is what actually determines legal ownership if there is ever a dispute.
Issuing shares looks like form-filling, but the wrong sequence — allotting without s.551 authority, or skipping pre-emption — can leave a defective allotment that surfaces in your next diligence. A SuLe solicitor can run the resolutions, waivers and filings correctly the first time. Book a free investment readiness check
Keep reading: What is an SH01 and when must I file it? · What are pre-emption rights — and how are they disapplied? · What board and shareholder resolutions does a funding round need? · What happens at completion of a funding round? · How many shares should I issue when incorporating a UK startup? · Ordinary shares vs preference shares in UK startups — what's the difference?
Primary sources: Companies Act 2006 · GOV.UK — Running a limited company
