Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Shares definition

What does Shares mean? In company law practice, a share is a unit of a member’s interest in a company, carrying the rights and obligations attached to its class (for example, voting, dividends and return of capital on a winding up). The Companies Act 2006 simply states that a share is a share in a company’s share capital; the Irish Companies Act 2014 adopts a broadly equivalent approach. Usage and effect are consistent across England & Wales, Scotland, Northern Ireland and Ireland. A company’s share capital comprises the number of shares it allots and issues to investors on or after incorporation. Those...

Private companies limited by shares: UK practitioner guide to key features, governance, shareholder rights, procedures, incorporation, and comparison with public companies under the Companies Act 2006

Published by a LexisNexis Corporate expert

Practice notes

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This Practice Note outlines the key features of a private company limited by shares. It also explains the principal differences from public companies limited by shares, and why this structure might be selected as the preferred business vehicle rather than another UK company form.

What is a private company limited by shares?

A private company limited by shares is a distinct legal person, separate from its members. Ownership rests with members through their shareholdings, while directors run the company in accordance with the Companies Act 2006 (CA 2006) and the company’s constitutional document, the articles of association.

This is a widely adopted vehicle. The Companies House public register records over five million limited companies, of which more than 95% are private companies limited by shares.

The other UK company types available under the CA 2006 are:

public companies limited by shares—see Practice Note: Public companies limited by shares
private companies limited by guarantee, which are primarily used by charities and other not-for-profit organisations—see Practice Note: Companies limited by guarantee, and
unlimited

...

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Web page updated on 21/05/2026

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