Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Authorised share capital definition

What does Authorised share capital mean? Authorised share capital is the maximum aggregate nominal (par) value of shares a company is permitted by its constitution to allot. It operates as a cap on issuances measured by nominal value only and does not indicate the company’s market value, net assets or worth. England & Wales, Scotland and Northern Ireland: The Companies Act 2006 abolished the statutory concept from 1 October 2009. Companies no longer have an authorised share capital unless their articles of association expressly include one (some legacy companies retain it from pre‑2009 memoranda). Any such limit now functions purely as a restriction...

Authorised share capital post-2009 under the Companies Act 2006: transitional and voluntary articles limits, due diligence points and consequences of exceeding allotment maxima

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Practice notes

Share allotments are regulated by the Companies Act 2006 (CA 2006). The applicable requirements differ according to the nature of the company proposing the allotment, and in each case depend on whether there is a single class of shares or multiple classes in issue. In addition to the relevant statutory provisions, any proposed allotment of shares within a company requires careful consideration of the following:

the company’s articles of association; and
whether the concept of authorised share capital remains pertinent to the company

The concept of authorised share capital should not be confused with the separate obligation on public companies to maintain an authorised minimum allotted share capital; for guidance on this, see the section on Additional requirements for public companies in Practice Note: Incorporating a company. For more detailed information on share allotments across different company types, see Practice Notes: Allotment and issue of shares—private companies with one class of shares; Allotment and issue of shares—private companies with more than one class of share and public unlisted companies; and Allotment and issue of shares—listed companies. In addition, refer to Practice Note: Allotment and issue of shares—introductory points...

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Web page updated on 21/05/2026

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