How to update shareholder information at Companies House
Companies House, as you will be aware, is responsible for incorporating and dissolving limited companies, while at the same time registering the information about companies and making them publically available. This information is the one that is legally required by the company to provide. It helps to keep a track of the people invested in various companies without having to ask the company. But like with any data, this information is subject to frequent changes and expansion. So, when and how must you update the information?
When to update new shareholder’s information?
The easiest and most sensible way to update the information is during the annual returns (also called annual confirmation statement), since there is provision for mentioning changes while filing returns. This works just fine until and unless you want the changes to be effective immediately.
Is it required to inform Companies House if a shareholder changes address?
As individuals, people tend to move from one place to another, leading to change in addresses. However, only the first shareholders of the company (called “subscribers”) and the people with significant control (PSCs) are required to update their current addresses. Others can do it too, sure, but they are not legally bound to do it.
Is it required to inform Companies House about the entry or exit of a shareholder?
In the event of a shareholder joining or leaving the company, you don’t have any immediate compulsion to make updates. You can inform this during the upcoming annual return.
In the case of a shareholder leaving, you only have to provide the date of exit and (maybe) the transactional report of their shares.
In the case of a new shareholder joining the company, there is additional information to be reported apart from the date of joining. This includes the details of any purchase of shares from existing shareholders or the filing of “Return of Allotment of shares” in case new shares were created for the shareholder.
What happens to the shares in case of the death of a shareholder?
In the case of the death of a shareholder, the shares are passed on to his/her family members, until stated otherwise in the shareholder’s agreement. In case no immediate family members are present, the shares might go to the closest living relative.
However, many times the family members might not possess the required skills to handle those shares and may prove to be a hindrance in business decisions if the deceased held a substantial amount of shares. In such cases, the family could be persuaded to sell their shares to other shareholders.
Shareholder’s agreement is important due to situations like this, and shareholders must keep such factors in mind while signing it.