How to Change Shareholders on Companies House?

Why Updating Shareholders at Companies House Matters

Companies House acts as the official register of UK companies. It keeps a public record of key details such as directors, shareholders, and registered addresses, which must always reflect the current structure of your business. If shareholder information is outdated, it can cause compliance issues and make things tricky if need to prove ownership or if you’re seeking investment.

As companies grow, it’s pretty normal for the shareholder structure to change, whether through new investments, ownership transfers, or internal changes. Knowing how to change shareholders on Companies House is important for every business owner.

If you run a limited company with shares, you’ll see shareholders come and go as people buy in or sell their stake and stop being members. It's essential to inform Companies House about these changes in the next annual confirmation statement.

Don’t forget about your statutory register of members, either. That’s your company’s official list of shareholders, and it’s your responsibility to keep it updated whenever there’s a change. This helps in making sure the information is always current and accurate.

Definition of a Shareholder

A company shareholder is an individual who owns a portion of a company. When an individual holds shares in a company, they become a shareholder, signifying partial ownership. That status comes with a set of rights, like voting on key issues at shareholder meetings. The number of shares an individual owns represents their ownership stake in the company. More shares, more leverage at the table.

On top of that, if the company is performing well, you can receive a share of the company's profits called dividends. The more shares you have, the more of the company you own, and the more say you have in how it operates. But remember, holding shares isn’t just about collecting dividends and casting votes. There’s responsibility involved, too. As a shareholder, you’re invested in the company’s direction and long-term success.

Who Can Become a Shareholder?

In the UK, almost anyone can become a shareholder, as long as they meet basic legal requirements. This flexibility makes it easier for businesses to raise funds and involve the right people in their growth. Shareholding companies can have any of the following shareholders:

• Individuals - Most shareholders are private individuals who invest in a company, whether they are founders, family members, or outside investors.
• Other Companies - A company itself can hold shares in another business, often as part of a group structure or investment strategy.
• Partnerships - In some cases, partnerships may acquire shares, with the partners collectively holding ownership rights.
• Trusts or Charities - Trusts, charities, and other legal bodies can also hold shares, provided the company’s articles of association allow it.
• Minors – Children under 18 can technically own shares, but their shares are usually held on their behalf by a parent or guardian.

While shareholders definitely have significant power in making key decisions, they don’t actually get involved with the company’s day-to-day management of financial affairs, that’s the director’s responsibility.

It's important to note that in a limited company, a shareholder can appoint themselves as director, which means they get to handle both roles. Honestly, this is pretty common in smaller companies, where people often prefer to keep things streamlined and in trusted hands.

Common Reasons for Changing Shareholders

Shareholder changes are a normal part of running a company. They can happen for different reasons, such as:

• Selling or transferring shares – A current shareholder may decide to sell their shares to another person or business, either for profit or as part of succession planning.
• Bringing in new investors – Companies often issue or transfer shares to raise money and bring fresh investment.
• Employee share schemes – Businesses sometimes reward staff by giving them shares, which means adding new shareholders.
• Shareholder leaving the company – If a shareholder decides to step away, their shares may be transferred to others or bought back by the company.
• Inheritance or gifting – Shares can be passed on to family members through inheritance or gifted during someone’s lifetime.
• Restructuring Ownership – In some cases, companies re-organise ownership to adjust voting rights, prepare for a merger, or simplify the shareholder base.

Do You Need to Inform Companies House When Shareholders Change?

Any changes to your company’s shareholders need reporting, but not with the same urgency as director changes. If a director steps down, you need to notify Companies House immediately, without any delay. With shareholders, updates are made through the confirmation statement (CS01). Companies usually file this annually, but if your shareholder details change, you can file an updated confirmation statement at any point in the year. There’s no immediate filing requirement each time shares change hands, just make sure it’s reflected in your next CS01.

This difference often causes confusion. Director leaves? Notify Companies House right away. But for shareholders, if someone sells or transfers their shares, you only have to record that in your next confirmation statement. But, your internal register of members must be updated as soon as the change happens. That’s the official, legal record of share ownership, and it needs to stay accurate. Neglecting that? Not worth the risk.

The primary purpose behind reporting changes in shareholding is to maintain transparency. Companies House keeps these records public so investors, lenders, and other parties can easily verify a company’s ownership structure. This openness helps build trust and ensures everyone’s operating with the same information having clarity about who actually holds a stake in the business.

Keeping both your internal register and Companies House filings updated makes your ownership structure clear and signals to clients and partners that your company is professional and trustworthy.

How to Add a Shareholder to a Limited Company

Adding a new shareholder to a limited company is a common step when raising investment, rewarding a key team member, sharing ownership with family members, or bringing in a strategic partner. The process is simple, but there’s definitely a right way to do it if you want to keep both your company records and Companies House filings accurate and compliant.

1. Check the Articles of Association

Review your articles of association. There may be some rules on how new shareholders can join the party, sometimes it means getting other shareholders or directors to approve. Don’t forget to check your shareholders’ agreement if you’ve got one; those sometimes include extra rules around share transfers and new issues.

2. Decide How the New Shareholder Will Get Shares

There are two main ways to add a shareholder:

1. Issuing new shares - You create additional shares and allocate them to the new investor. This increases the total number of shares in the business.
2. Transferring existing shares - An existing shareholder sells or gifts their shares to the new person or organisation. The total number of shares stays the same, but ownership changes.

3. Complete the Paperwork

• If issuing new shares, you’ll need to pass a board resolution approving the issue, update the register of members, and prepare a share certificate for the new shareholder.
• If transferring shares, you'll need to complete a stock transfer form (J30). You must pay the stamp duty on shares to HMRC for transfers over £1,000.

4. Update the Company’s Register of Members

The register of members is the official record of who owns shares in your company. You must update it immediately after adding a shareholder.

5. File Changes with Companies House

When it comes to Companies House, you don't need to report instantly. Just make sure the details show up in your next confirmation statement (CS01). If you’ve issued new shares, file a Return of Allotment of Shares (SH01) within one month, don’t let that deadline slip by.

6. Provide the new shareholder with their share certificate

Hand over the share certificate to your new shareholder. It’s their official proof of ownership, not just a handshake and a promise.

How to Remove a Shareholder from a Company

When a shareholder decides to leave or the company makes that call, it’s not as simple as just scratching their name off the records. There’s a formal process involved, usually a transfer of their shares to someone else, or sometimes the company buys them back. That’s how you make sure ownership stays clear and everything’s properly recorded.

1. Check the Articles of Association and Shareholders’ Agreement

First, check your company’s Articles of Association and any shareholders’ agreement you have in place. These documents outline the procedures for removing or buying out a shareholder, detail any restrictions on who can purchase shares, and may require approval from other shareholders before any transfer happens.

2. Decide on How the Shares Will Be Transferred

A shareholder’s exit can happen in a few ways:

• Voluntary sale: The shareholder may agree to sell their shares to another shareholder, the company, or an external investor.
• Share buyback: The company itself can purchase the shares, which may then be cancelled or kept in treasury.
• Compulsory transfer: If permitted by your shareholders’ agreement, a shareholder may be required to sell their shares in certain scenarios, such as a breach of contract or leaving from the company.

3. Complete the Required Paperwork

• For share transfers, a stock transfer form needs to be completed. If the share value exceeds £1,000, stamp duty at 0.5% is payable to HMRC.
• For share buybacks, a written contract is usually required, along with shareholder approval via a special resolution.

4. Update the Company’s Register of Members

Once the shares change hands, promptly update the register of members. This is the company’s official record of share ownership and needs to be kept accurate at all times.

5. Report to Companies House

Any changes in shareholding must be reported in your next Confirmation Statement (CS01). If you want the update reflected on the public record sooner, you can file an early CS01.

6. Issue updated share certificates

Once the shares have been transferred, issue new share certificates to the incoming shareholder and cancel the old ones accordingly.

Further information is available on Companies House’s guide on how to change shareholders.

How to Transfer Shares After Death of Shareholder

The death of a shareholder can be a challenging time for both the individuals involved and the company itself. Shares held by the deceased don’t just disappear, they become part of the estate, to be distributed according to the will, or following inheritance law if there isn’t one. The executor should notify the company about the shareholder’s passing so the shares can be transferred as needed.

It’s also important to update Companies House about the shareholder’s death in the next confirmation statement. Once the shares move to the new beneficiary, you’ll need to supply details about the new shareholder and note the previous member’s date of death. This process applies too if a member leaves the company for other reasons.

Documents You’ll Need

Here’s what paperwork or documents actually required when you’re changing shareholders in a limited company, definitely not something you want to rush or skip steps on.

• Stock Transfer Form (J30 or otherwise) - You’ll need a Stock Transfer Form, usually the J30, any time shares move between people, whether that’s a sale or a gift.
• Register of Members - Any time shares are transferred, issued, or cancelled, you must update internal register of members to reflect the changes.
• Share Certificates - When a transfer happens, the old certificate is cancelled and a new one is issued to the new shareholder.
• Confirmation Statement (CS01) - You must notify Companies House of any changes to shareholders via the Confirmation Statement (CS01). This step can’t be ignored if you want to remain compliant.

Costs Involved

Changing shareholders in your company usually comes with some costs, so it’s practical to understand what’s involved before you begin. The exact amount varies based on how you handle the transfer, the value of the shares, and whether you bring in professional help.

Filing the Confirmation Statement (CS01)

Every company must submit a Confirmation Statement to Companies House at least once a year. If you need to update shareholder details ahead of your regular filing, there’s a submission fee:

• £34 if you file online
• £62 for paper filing

This fee stays the same, whether you file early or stick to your routine annual deadline.

Stamp Duty for Share Transfers

For share transfers over £1,000, stamp duty is set at 0.5% of the transfer’s value. For instance, transferring £10,000 worth of shares means you’ll pay £50 in stamp duty. This is typically paid to HMRC, and the stock transfer form must be officially stamped to confirm payment.

Professional or Accountant Fees

Plenty of small businesses manage shareholder changes themselves, but some situations are more complex. Share buybacks, inherited shares, or large investment deals often require legal or tax advice. In these cases, you might need to pay for professional support, such as a small business accountant or solicitor. Fees vary depending on the complexity of your situation, but the cost is usually justified to prevent mistakes that could impact ownership or tax matters.

Need Help Changing Shareholders on Companies House?

Transferring shareholders in a limited company might sound a bit formal, but honestly, the process is pretty easy. You transfer the shares, update the internal register of members, and file the Confirmation Statement (CS01) with Companies House. That’s really the core of it.

Most small businesses can handle these steps online without too much hassle. The important thing is just keeping your records straight and up to date, this protects the company and makes sure there’s never any confusion about ownership.

You can definitely take care of some steps yourself, but let’s be real: bringing in a professional can really save you time and help you avoid mistakes. A limited company accountant or solicitor can walk you through the paperwork, deal with HMRC if stamp duty comes into play, and make sure Companies House filings are correct the first time.

Need help with shareholder changes? Book a free consultation with one of our accountants today. We’ll keep your business records accurate, compliant, and stress-free.