The Department for Business, Innovation and Skills has published a consultation on the financial information required to be included in a statement of capital following identification of practical problems with the current requirements for share premium information.
The issue
The statement of capital that companies are required to file at Companies House as part of the annual return and if they make certain changes to their share capital must include the amount paid up on each share, including nominal amount and any share premium. However, it may be impossible to attribute a specific amount of share premium to each share in issue, either because records don’t exist or as a result of previous corporate actions.
The proposed solution
In recognition of the problem, BIS has proposed amending the requirements so that, as a minimum, all companies would need to provide, both for each class of shares and in total:
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the number of shares;
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the amount not paid up on the shares; and
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for public companies only, the total nominal value paid up on the shares.
Depending on responses to the consultation, BIS might follow the “maximum” option, which would also require all companies to include the total nominal value paid up on the shares and also:
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the total nominal value of each class of shares and in total (whether paid up or not); and
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as an aggregate figure for the whole company, the value of the share premium account.
Whichever option is chosen will remove the need to allocate share premium between shares or between classes and will therefore resolve the problems.
Next steps
The consultation is available here and responses are required by 11 January 2010. In the meantime, companies will still need to allocate share premium between shares and classes when completing a statement of capital and should do so in accordance with the approach outlined in the ICSA Guidance on Statement of Capital (see here).
