Statement of Capital Explained

A statement of capital is a statutory document required under UK company law that provides a formal summary of a limited company's share capital at a specific date. This document gives a clear picture of the company's issued share capital, including the number of shares issued, their nominal value, and how much, if anything, remains unpaid. It is a legal obligation for most companies limited by shares in England and Wales and must be filed with Companies House in certain circumstances.

This article explains what the statement of capital is, when it must be filed, what it must contain, how it relates to other corporate filings, and practical points that company directors, company secretaries, shareholders, and interested members of the public should understand.

What Is a Statement of Capital?

A statement of capital is a snapshot of a company's share capital at a given moment. It was introduced as part of the reform of company law under the Companies Act 2006 and reflects a company's issued share capital, not its authorised capital (which was abolished under the 2006 Act).

For companies limited by shares, it replaces historical requirements under earlier legislation that focused on authorised share capital and the nominal amount of shares a company could issue. The statement shows investors, regulators, and the public the real position of a company's issued shares at the reporting date.

Issued share capital refers to shares that have been allotted to shareholders and are considered outstanding. This contrasts with authorised share capital, which was a former statutory ceiling on how much capital a company could issue. The Companies Act 2006 removed authorised capital, meaning companies no longer have to define a maximum share capital on formation.

When Must a Statement of Capital Be Filed?

You must provide or update a statement of capital in the following circumstances:

1. Company Formation

When a company limited by shares is formed, a statement of capital must be filed as part of the incorporation application. This usually forms part of Form IN01, the document submitted to register the company.

2. Confirmation Statement

Every company limited by shares must file a confirmation statement, typically at least annually. If there have been changes to the company's share capital since the most recent statement of capital, a current statement must accompany the confirmation statement.

3. Changes to Share Capital

If the company alters its share capital - for example by issuing new shares, cancelling existing shares, consolidating or subdividing share classes - a statement of capital must be filed with the specific statutory form relating to that change. Common forms include:

• SH01 – Return of allotment of shares
• SH02 – Consolidation, subdivision, reclassification, or redemption of shares
• SH06 / SH05/ SH07 – Cancellation of shares or treasury shares
• SH14 / SH15 / SH19 – Redenomination or capital reduction documents

Each of these filings requires the updated statement of capital to reflect the new share position.

What Information Does a Statement of Capital Contain?

A compliant statement of capital must include the following details as at the date of the statement:

Total Issued Shares

• The total number of shares the company has issued.
• The aggregate nominal value of those shares (number of shares × nominal value per share).

Share Class Details

For each class of share, the statement should include:

• Prescribed particulars of rights attached - such as voting rights, dividend rights, and rights on a distribution of capital.
• The total number of shares of that class.
• The aggregate nominal value of shares of that class.

Amount Paid and Unpaid

• The amount paid up on each share, and
• The aggregate amount unpaid if there are any amounts still owed to the company by shareholders (for example, where shares are partly paid).

This information ensures that the company's share capital position is transparent and easily accessible to regulators, creditors, and investors.

Practical Example

Suppose ABC Ltd has two classes of shares:

• Ordinary shares: 100 shares with a nominal value of £1 each
• Preference shares: 50 shares with a nominal value of £0.10 each

The statement of capital would show:

• Total issued shares: 150
• Aggregate nominal value: £105
  • Ordinary class: 100 × £1 = £100
  • Preference class: 50 × £0.10 = £5

If shareholders have not fully paid the amounts due on these shares, any outstanding balance would be shown under the “aggregate amount unpaid”.

Filing the Statement of Capital

Most of the time, the statement of capital is filed as part of another statutory form. For example:

• On incorporation, it is part of Form IN01
• When shares are allotted, it forms part of Form SH01

In rare cases, a company may need to file a stand-alone statement of capital (e.g., where a company is reducing its capital supported by a solvency statement or court order). In such cases, Form SH19 is used to file the statement with Companies House.

Rights, Transparency, and the Public Record

Once the statement of capital is filed with Companies House, the information becomes part of the public record. Anyone can inspect the registered details of a company's share capital. This transparency supports commercial confidence, lending decisions, and investment analysis, because it gives clarity on who owns what proportion of a company and the rights attached to their shares.

If a member of a company requests a copy of the most recent statement of capital, the company must be prepared to provide it. This requirement enables shareholders to know the current share structure and their relative ownership.

Common Issues and Practical Considerations

Precision of Values

Companies House systems have limitations on numerical precision when capturing share values. For example, aggregate nominal values may be rounded when entered into the electronic system if they have more than a specified number of decimal places.

Errors or Omissions

Incorrect statements of capital can lead to rejected filings or require correction. Directors and company secretaries should ensure correct figures and complete prescribed particulars of rights. If uncertain, professional help from accountants or legal advisors can reduce the risk of errors.

Changes without Filings

If share capital changes are not accompanied by the correct filing documents within statutory time limits, the company may risk compliance issues with Companies House, which could lead to enforcement notices or difficulties in corporate transactions.

Key Takeaways

A statement of capital is a key statutory requirement for companies limited by shares in the UK. It provides a transparent, up‑to‑date snapshot of a company's issued share capital, including the number of shares, their nominal value, and any amounts paid or outstanding. Companies must file this statement on incorporation, with confirmation statements, and whenever share capital is altered. The document helps protect investors and creditors by making share capital details publicly available through Companies House.