--- title: "Share certificates: Why you still need them, and what they need to include" id: "400864" type: "post" slug: "share-certificate" published_at: "2023-12-22T16:36:06+00:00" modified_at: "2023-12-22T16:36:06+00:00" url: "https://seedlegals.com/resources/share-certificate/" markdown_url: "https://seedlegals.com/resources/share-certificate.md" excerpt: "Every time you issue shares, you need to make it official with a share certificate. Find out how to create and send professional share certificates online." taxonomy_category: - "Startup Guides" --- 4 min read Expert reviewed This article has been fact-checked by a SeedLegals subject matter expert. [Meet our experts](https://seedlegals.com/authors-and-experts/) and learn more about our review process and quality assurance in our [editorial policy](https://seedlegals.com/editorial-policy/) . # Share certificates: Why you still need them, and what they need to include Published: Dec 22, 2023 Contents [What are share certificates?](#what-are-share-certificates) [Why do you need share certificates?](#why-do-you-need-share-certificates) [What information do share certificates need to show?](#what-information-do-share-certificates-need-to-show) [Why does the share certificate show the nominal value and not the price paid per share?](#why-does-the-share-certificate-show-the-nominal-value-and-not-the-price-paid-per-share) [Who needs to sign the share certificate?](#who-needs-to-sign-the-share-certificate) [When do you need to issue a share certificate?](#when-do-you-need-to-issue-a-share-certificate) [How long are share certificates valid for?](#how-long-are-share-certificates-valid-for) [What other documents do you need to issue shares?](#what-other-documents-do-you-need-to-issue-shares) [Talk to the experts](#talk-to-the-experts) [Writer Kirsty MacSween Senior Copywriter](https://seedlegals.com/resources/author/kirsty/) [Expert contributor Seyjel Danani Senior Funding Expert](https://seedlegals.com/resources/author/seyjel-danani/) A fresh share certificate goes along with many pivotal moments in your startup’s life – whether you’re building out the founding team, closing a funding round with investors or securing a new team member to drive the next stage of growth. Let’s dive in to discover what a share certificate means in legal terms, how to create one and what to do with it. - [What are share certificates?](#what-are-share-certificates) - [Why do you need share certificates?](#why-share-certificates-needed) - [What information do share certificates need to show?](#whats-on-share-certificates) - [Why does the share certificate show the nominal value and not the price paid per share?](#nominal-value-vs-market-value) - [Who needs to sign the share certificate?](#who-signs-share-certificate) - [When do you need to issue a share certificate?](#share-certificate-deadline) - [How long are share certificates valid for?](#share-certificate-validity-length) - [What other documents do you need to issue shares?](#issue-shares-other-documents) - [Talk to the experts](#talk-to-experts) ## What are share certificates? A share certificate is a legal document that proves ownership of shares in a company. It specifies details such as the shareholder name(s), number and type of shares owned, the nominal value of the shares, and the date they were issued. It’s your company’s responsibility to create and issue the share certificates to the shareholder, within two months of allotting the shares. ## Why do you need share certificates? The simple answer is that you need to give your shareholders share certificates because [part 21 of the Companies Act 2006](https://www.legislation.gov.uk/ukpga/2006/46/part/21/chapter/1/) says so. In many ways, share certificates are a relic of a pre-digital age, when recordkeeping relied on a trail of physical paper. With [digital cap tables](https://seedlegals.com/start/cap-table/) and [shareholder registers](https://seedlegals.com/resources/what-is-a-shareholder-register/) you could argue that the share certificate is outdated. Nevertheless, share certificates are an important part of making sure that from the start, your company’s ownership structure is set up correctly and in a scalable way. If you don’t issue share certificates on time after new shares are allotted, you could face financial penalties. Any unsolved or unclear issues around equity could also cause problems in further funding rounds. When potential investors are doing their due diligence, you don’t want any confusion about who owns what. ##### SeedLegals ### Manage equity the easy way ✅ Issue, transfer and split shares ✅ Create, send and sign share certificates ✅ Manage your equity on auto-updating cap table ✅ Store all documents securely in your data room ✅ Get unlimited expert help [Start free](https://app.seedlegals.com/signup) ## What information do share certificates need to show? Whatever format or template you use, here’s the list of information your share certificate needs to display: - Your company’s name and registration number - Your company’s registered office address - Share class - Number of shares issued - Nominal value of each share - Date of issue - The shareholder’s name and address You don’t need to issue your shareholder an individual certificate per share, just per share class. Here’s what the digital share certificates you generate on SeedLegals look like 👇 Share certificate example **How have SeedLegals share certificates evolved?** See how we refreshed our [share certificate design](https://seedlegals.com/resources/share-certificate-design-refresh/) for 2023. ## Why does the share certificate show the nominal value and not the price paid per share? > Founders often ask us: why does the certificate note the nominal value and not the price the investor actually paid? > > Shares have two values: the **nominal value** and the **current market value**. > > The **nominal value** is the minimum price a share can have, which is used for accounting purposes and to keep track of who owns what percentage of the company. > > The **current market value** at the time of your funding round is recorded on the SH01 you must file with Companies House. The [SH01](https://seedlegals.com/resources/how-to-file-sh01-form/) > is the source of truth that records both the nominal value and the price paid per share at the time of the transaction. So you don’t need to worry that the share certificate doesn’t record the price paid – the nominal value is what should appear on the certificate. > > [Seyjel Danani](https://seedlegals.com/resources/author/seyjel-danani/) > Senior Funding Expert, > > [SeedLegals](https://seedlegals.com/) ## Who needs to sign the share certificate? Two company directors need to sign. If your company doesn’t have two directors, you can have either the company secretary or a witness sign instead. ## When do you need to issue a share certificate? Under [Companies Act 2006](https://www.legislation.gov.uk/ukpga/2006/46/part/21/chapter/1/) , you have two months from the time that you allot the shares to issue the share certificates. The clock on that two month deadline starts ticking from the date the [board and shareholders approved](#issue-shares-other-documents) the allocation of the shares. ## How long are share certificates valid for? Share certificates don’t have an expiry date. After it’s issued, a share certificate remains valid until the shareholder named on it sells or [transfers the shares](https://seedlegals.com/grow/share-transfers/) . The certificate would then be cancelled and a new one issued to the person the shares were transferred to. **Tips on how to transfer shares** Find out the rules surrounding [share transfers and the tax issues](https://seedlegals.com/resources/transferring-shares-to-someone-here-are-the-tax-issues-you-need-to-know/) to know about. ## What other documents do you need to issue shares? Sending out share certificates to your shareholders is just one part of the process of issuing shares. You also need to: - Pass a [board resolution](https://seedlegals.com/board-management/) and [shareholders resolution](https://help.seedlegals.com/en/2767688-written-resolution-for-the-allotment-of-new-shares-template?_gl=1*1ebkgo2*_ga*MTIyMzgzMTQ2NS4xNjgzMTAzMDQy*_ga_P024RMJJ48*MTY4MzY0NzMwMi4yMS4xLjE2ODM2NDczMTUuNDcuMC4w&_ga=2.148500727.1591971837.1683620730-1223831465.1683103042&_gac=1.215470309.1683276948.Cj0KCQjw0tKiBhC6ARIsAAOXutkJah9cfH2UIiT5K2CwsVZoMsYszcq_3IFsJJWyb081vSvAA_lV4h8aApI6EALw_wcB) to approve the share allotment - [File the SH01 form](https://seedlegals.com/resources/how-to-file-sh01-form/) through SeedLegals to notify Companies House that your share capital has changed - Update the [shareholder register](https://seedlegals.com/resources/what-is-a-shareholder-register/) within two months - Update your [cap table](https://seedlegals.com/resources/cap-table-what-it-is-and-why-you-need-one/) - Include the new allotments in your next [confirmation statement](https://www.gov.uk/running-a-limited-company/confirmation-statement) If that looks like a lot of things to keep track of, don’t worry. On SeedLegals, these tasks are automated so it’s easy to follow the process – and there’s friendly, expert help whenever you need it. ## Talk to the experts Whether you’re planning a funding round, working out how to share equity with your employees or looking for a one-stop solution to manage your board and cap table, we’re here to help at SeedLegals. Book a slot below for a free chat with our friendly team to find out more. - Sources [Companies Act 2006 – Latest available (Revised)](https://www.legislation.gov.uk/ukpga/2006/46/contents) . Accessed 22/12/23 ## Related posts [9 min read How to transfer shares, and using Gift Hold-Over Relief to defer taxes Our guide to tax implications of transferring or gifting shares. Read this before you transfer or give shares to a partn... Anthony Rose](https://seedlegals.com/resources/transferring-shares-to-someone-here-are-the-tax-issues-you-need-to-know/) [8 min read How to file an SH01 form: a step-by-step guide Issuing new shares? Find out how to fill in and file the SH01 form for return of allotment of shares to Companies House.... Kirsty MacSween](https://seedlegals.com/resources/how-to-file-sh01-form/) [11 min read Share options explained: the essential guide for UK startups Want to offer your team equity in your company? Our guide covers the facts about share options: how and when to set up a... Kaylin Sullivan](https://seedlegals.com/resources/share-options-explained/)