Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Stock definition

What does Stock mean? Stock (or stock-in-trade) describes a business’s goods held for resale in the ordinary course of trade, often called inventory in accounting. In legal practice the term is descriptive rather than a defined statutory concept; rights and obligations typically arise under contract and under the Sale of Goods legislation in each jurisdiction, which governs “goods” generally rather than “stock”. Stock commonly features in: - Asset and share purchase transactions (identification, valuation and title transfer). - Security and banking documents (as a circulating asset usually covered by a floating charge; fixed security over stock is uncommon). - Insolvency and restructuring (realisation of stock; impact of retention...

Reconversion of pre‑2009 stock into shares: UK Companies Act 2006 section 620 procedure, consents, class rights, UKLRs/AIM, DTR and MAR requirements, and Companies House filings

Published by a LexisNexis Corporate expert

Practice notes

By long-standing statutory rules, a limited company with share capital was allowed, most recently under the now-repealed Companies Act 1985 (CA 1985), to:

convert some or all of its fully paid shares into stock; and
reconvert any or all of its stock into fully paid shares of any denomination (CA 1985, s 121).

Those powers had to be authorised by the company’s articles of association and each was to be exercised by a shareholders’ resolution passed at a general meeting. From 1 October 2009, when section 540(2) of the Companies Act 2006 (CA 2006) came into force, companies have been unable to convert shares into stock, unless such conversion was approved before that date. Nevertheless, where fully paid shares were turned into stock before 1 October 2009, the company may still reconvert that stock into fully paid shares of any nominal value, in line with CA 2006, s 620.

The nature of stock

Any quantity of fully paid shares in a limited company with share capital can be aggregated and turned into stock...

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Web page updated on 22/05/2026

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