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Onboarding – share class names and why they might be different or you get a warning message

When I get to the shareholder section of onboarding, there are no shares showing for the shareholders and an error message about share class names.  What is happening?  Don’t worry –  this is usually because of an issue with the share class names provided by Companies House –  usually the share class name is different in (i) the most recent statement of capital filing and (ii) the shareholding data (from the last confirmation statement or incorporation if no confirmation statement has been filed).  For more information read the FAQs below.

Companies House stores share class names separately – at the share capital level and at the shareholder level –  and does not check if they match!  The common reasons for this are:

• Typo – e.g. in one place the share class is “Ordinary A” and in the other it is “A-Ordinary”.
• The company’s share classes have changed (created new ones or renamed old ones) –  e.g. there has been an SH08 filed with details of the new share class name (“Ordinary Founder”) but the shareholders in the last confirmation statement were listed with the old share class name “Ordinary”.

In both cases, Kudocs tries to match the share class for the shareholders with the share class in the share capital.  It cannot work out if (e.g.) Ordinary A is the same as A-Ordinary.

If this happens, please contact us and we’ll take a look and see how best to resolve.

 

How does Kudocs calculate shareholdings & share capital?  Without going into the history of UK company law, a company can only have shares that are owned by its shareholders.  The share capital is the total of all the individual shareholdings.  Companies House, however, requires companies to inform it about share capital and shareholders/ shareholdings separately:

• Shareholders/ shareholdings are contained in the confirmation statement (which only needs to be filed once a year – but more frequently is not a problem). Or, if the company has not yet filed a confirmation statement, the shareholders listed in the incorporation.
• Share capital can be contained in a range of filings (SH01, SH02, SH06, etc) which need to be filed promptly after the relevant transaction.

This means that Companies House may have a share capital for a company that does not reconcile with the shareholdings .  For example, there has been a share capital filing made recently but the shareholder/ shareholding information remains as at an earlier date (ie in the confirmation statement or incorporation) .

When you add a company to Kudocs, it may be the case that the data Kudocs gets from Companies House has this issue – the share capital does not match the shareholdings.  Don’t worry!  You can fix this during onboarding (via Full Onboarding) or after onboarding (via Quick Onboarding) – see below.

Kudocs follows the legal position of using the shareholdings to calculate the share capital.  This means that when a company onboards to Kudocs the Companies House data may show a share capital of (e.g.) 100,000 Ordinary shares (based on SH01, SH02, etc filings), but the Companies House data only shows 2 shareholders with (e.g.) 30,000 Ordinary shares each (based on the last confirmation statement/ incorporation documents).   So there is a mismatch.  Kudocs will determine the share capital based on the shareholdings – ie 60,000 Ordinary shares – as Kudocs needs to allocate the shares to the shareholders: it cannot just add extra shares without knowing who owns them.

If you have a mismatch like this you can resolve it by:

• either completing Full Onboarding and update the shareholding information during onboarding (i.e. edit/ add the individual new shareholdings to bring the share capital up to match);
• or complete Quick Onboarding and the company will be added to Kudocs with the shareholdings from the last confirmation statement.  You can then complete the relevant processes in Kudocs (e.g. share issue) to bring the shareholdings – and so the share capital – up to date.

 

My company has subdivided/ consolidated its share capital since the last confirmation statement.  Kudocs shows the new nominal value but has not updated the shareholdings – why?  When onboarding pulls data about the company from Companies House.  We get different sets of data from Companies House:

• details of shareholders and shareholdings are provided as per the last confirmation statement.  Or, if the company has not yet filed a confirmation statement, the shareholders listed in the incorporation.
• share class info (nominal value and particulars) are provided as per the most recent share capital filings (ie SH01, SH02).