At some point a growing company often needs to bring someone new into its ownership — an investor putting money in, a co-founder joining, an employee rewarded with equity. There are two quite different ways shares change hands, and people routinely confuse them. You can transfer existing shares from one person to another, or you can allot brand-new shares. This guide is about the second — issuing new shares, and the Companies House form, the SH01, that reports it.
Allotment or transfer? They're not the same
The distinction matters because it determines the whole process. A transfer moves existing shares from one owner to another — the total number of shares in the company doesn't change, ownership just shifts. That's done with a stock transfer form (a J30), which you don't file with Companies House; we cover it fully in our guide to transferring shares and the J30 form.
An allotment is different: the company creates and issues entirely new shares, increasing its total share capital. Nobody's existing shares move; there are simply more shares now than there were. This is what you do when an investor puts in fresh money for new equity, and it's reported to Companies House on form SH01. If you're adding a shareholder by giving them newly created shares rather than some of your own, that's an allotment, and this is the route.
Before you allot: check you have the authority
Issuing new shares isn't something a director can simply decide unilaterally without checking the ground rules. You need authority to allot. The good news for most small companies is that if your company has only one class of shares, the directors generally already have that authority automatically under the Companies Act, unless your articles of association specifically restrict it. If you have multiple share classes, or your articles impose conditions, you may need a shareholders' resolution to grant or confirm the authority first.
Once you've confirmed the authority, the allotment is approved by the directors — recorded in a board resolution — together with any shareholder resolution that was needed. As with any significant company decision, that approval should be properly minuted.
The SH01: what it is and when to file
The SH01, formally the Return of Allotment of Shares, is the statutory filing that tells Companies House you've issued new shares. The deadline is firm: you must deliver it within one month of the allotment date. Filing late is a criminal offence for every officer of the company in default and can bring financial penalties — though, helpfully, a late filing doesn't actually invalidate the share issue itself. (Shares issued right at incorporation are an exception: those go on the IN01 incorporation form, not an SH01.)
What the form captures is the detail of what you issued: the date of allotment, and for each class of share, the number allotted, the nominal value per share, how much was paid and how much remains unpaid, and the currency. It also asks for the prescribed particulars of the rights attached to each class — voting, dividends, and so on. And it must include a statement of capital: a snapshot of your company's total share capital after the allotment, which is what updates your company's public record at Companies House. One thing that surprises people: the new shareholder's name doesn't actually go on the SH01 — the form records the shares and the capital, not who holds them.
After the allotment
Filing the SH01 isn't the end of it. Issuing new shares means updating your own records too: you issue a share certificate to the new shareholder for their shares, and you update your register of members to reflect the new holding — which, as the company's legal record of ownership, is what actually establishes them as a shareholder. We cover why that register matters in our guide to company statutory registers. The new shareholder's details then appear on the public record through your next confirmation statement, which is where Companies House picks up who holds the newly issued shares.
So the full sequence is: confirm authority to allot, approve the allotment by resolution, issue the shares, file the SH01 within a month, issue the certificate and update the register of members, and report the new shareholder at your next confirmation statement. It's more involved than a transfer, because you're changing the company's capital, not just who owns what.
Common questions
- When do I file an SH01?
- Within one month of allotting (issuing) new shares. You only file one when your company's overall share capital changes — issuing new shares — not when existing shares are transferred between people.
- What's the difference between an SH01 and a J30?
- An SH01 reports new shares being issued (an allotment), which increases your share capital, and is filed with Companies House. A J30 is for transferring existing shares between people, which doesn't change the share capital and isn't filed with Companies House.
- Does the new shareholder's name go on the SH01?
- No. The SH01 records the shares allotted and the statement of capital, not who holds them. The new shareholder appears on the public record through your next confirmation statement, and on your own register of members.
- What happens if I file the SH01 late?
- It's a criminal offence for the company's officers and can bring penalties, but it doesn't invalidate the share issue itself. You should still file as soon as possible — and ideally within the one-month deadline.