Issuing shares in a currency different to nominal value
Can you issue shares in a different currency to the nominal value (e.g. issue £ denominated shares for $$)? Legally, we think this should be fine. Provided the parties agree and the documentation covers this, it should not be a problem (in our non-professional opinion!). How much and how parties pay for shares is really an accounting question, not a legal one. Therefore there should be no legal problem with being paid or paying for shares in a different currency to their nominal denomination.
Can you file an SH01 when there are shares issued and paid for in a different currency to nominal? When it comes to recording a share issue at Companies House, it is a different matter… Whilst there is no problem with having a different payment currency in Kudocs and the company registers, Companies House does not have the ability to accept an SH01 (or any other relevant statement of capital filing) where the amount paid is in a different currency to the nominal currency.
Looking at the paper form SH01, you can see there is only one field for currency, and this has to apply to both the nominal value and amount paid. The same is true in the electronic submission that we send to Companies House – they have to be the same currency.
Therefore, we suggest that when shares are issued and paid for in a different currency to the nominal value, you record the share issue in Kudocs using the conversion rate as at the date/ time of the transaction. You can always add notes to the share issue to show that funds were received in a different currency, etc.
Please contact us if you’d like to discuss this further.
Can I file a paper SH01 instead? Yes, you can record the share issue in Kudocs (noting the different currency for payment) but select not to file the SH01 at Companies House using Kudocs – for the reasons set out above. You can then manually prepare an SH01 and write/ type the currency and amount paid in the “Amount paid” column. E.g. you could have £1 shares issued and paid for at $3.56. So GBP or £ would go in the “Currency” column and $3.56 would be manually typed in the “Amount paid” column. We believe that Companies House will accept this.