Knowledge Base: SH02 Form

This guide contains:

• What is an SH02?
• When to Use SH02?
• What is Nominal Value?
  • Definition
  • Do I need to alter the nominal value?
• How to File SH02?

What is an SH02?

The SH02 form is used to notify Companies House of a share subdivision (share split) or consolidation.

When to Use SH02?

Many founders incorporate their start-up with far too few shares - 1, 100, or 1000 are common. You may therefore need to consider subdividing shares before taking on investment - this can be done swiftly online at Companies House, after the company’s shareholders have passed a standard resolution. Subdivision (or 'share-splits') splits each share in your company into a larger number of shares, which will allow you to achieve more granular investment amounts.

It’s worth noting that each share's nominal value changes as a result of the share split.

What is Nominal Value?

Definition

The nominal value of a share is its basic value on issue, as determined by a company's shareholders, excluding any "share premium" that reflects its market value. A share's nominal value is often £1, 10 pence or 1 pence, but can be any amount.

Do I need to alter the nominal value?

If you subdivide your shares you must also alter their nominal value by the same ratio. If you specified a nominal value of £1.00 on incorporation and then subdivide 1,000 shares into 100,000 then your nominal value will change to £0.01 – in this example, the number of shares has been multiplied by 100 and the nominal value divided by 100. This ensures that the aggregate nominal valuation remains static.

And don't worry, nominal values routinely have lots of decimal places - values like £0.00001 are acceptable and common.

How to File SH02?

• Pass an Ordinary Resolution: The shareholders must pass a resolution to approve the subdivision, signed by at least 50% of the shareholders.

• Complete the SH02 Form: File the SH02 form with Companies House to formally record the share subdivision.

Check out our step-by-step guide on filing your SH02 for more detailed instructions.