What does joint shareholding mean in a UK company? Joint shareholdings are company shares co-owned by two or more people. This arrangement is common in situations such as family businesses or property management companies (for example, flat owners forming a Right-to-Manage company), but it can happen in any company.
One person’s name is always listed first as the ‘senior holder’. They act on behalf of the other joint holders for certain legal purposes.
At the time of formation, Companies House requires each initial subscriber share to be held in a single name – in other words, joint shareholdings are not permitted. However, once the company has been formed, the shares can be transferred into a joint shareholding.
In this article, we cover everything you need to know about joint shareholdings, including how the process works, how to make changes, and what happens if you need to transfer shares.
Key takeaways
- Joint shareholdings are where two or more persons co-own a share
- Joint shareholders must designate a senior holder to exercise voting rights and manage company communications effectively.
- Companies can limit joint shareholders to make ownership more straightforward.
- Upon a joint shareholder’s death, the surviving holders automatically retain ownership, so there must be administrative updates to reflect the change.
What rights and responsibilities do joint shareholders have?
Joint shareholders do not have equal rights under the Companies Act. As per section 286 of the Companies Act 2006, only the ‘senior holder’ of a joint share has the right to vote at general meetings, choose someone else to vote on their behalf (appoint a proxy shareholder), and sign members’ written resolutions.
- What is a limited company subscriber?
- How many shares should I issue when forming a company?
- What is a company shareholder?
Who is the senior holder of a joint share?
The senior holder is the person whose name is first listed in the register of members, before the names of the other co-owners of the share.
For example, if Alice and Bob jointly own 100 shares, Alice (if listed first) alone casts the vote for those 100 shares. The other joint holders have no separate vote – they must agree privately on how the senior holder will vote. The senior holder’s name should therefore be the first one entered on the stock transfer form or allotment documentation.
Can non-senior joint shareholders attend meetings?
There’s no rule in the Companies Act which says non-senior joint shareholders can’t attend meetings. As there’s no explicit rule excluding them, it’s generally accepted that all joint co-owners may attend and speak at a general meeting. Only one vote is cast per joint holding by the senior holder.
How do joint holders share information?
Joint shareholders must also decide among themselves how to handle company correspondence. Legally, a company only needs to send notices and documents to the senior holder.
In practice, this means the senior holder receives items such as the share certificate, AGM notices, copies of accounts, written resolutions, dividend vouchers, and any share offers. By delivering communications to the senior holder’s address, the law treats them as delivered to all co-owners.
Nevertheless, joint holders should agree on how the senior holder will share information (for example, by forwarding copies or discussing decisions).
How many joint shareholders can a company have?
Companies can issue shares to as many joint shareholders as they wish, unless they specify a limit or prohibit joint shareholdings in their articles of association or a shareholders’ agreement.
There’s no statutory limit on the maximum number of people who can co-own a share in a private company. However, for administrative reasons, many companies include a provision in their articles restricting the number of joint holders to four per share.
Generally, company directors also have the authority under the articles to refuse the registration of any share transfer. They could, potentially, exercise this power if a joint shareholding is likely to be an administrative burden on the company.
Furthermore, article 63(5)(e) in the model articles for public limited companies (PLCs) expressly states that “The directors may refuse to register the transfer of a certificated share if … the transfer is in favour of more than four transferees.” In other words, there’s a limit of 4 people who can jointly own the same share.
What documents and communications do joint shareholders receive?
When dealing with communications and documents related to shares, there are certain official documents you need to be aware of.
Share certificates
Standard practice is to issue one share certificate per jointly held share. The certificate lists all joint holders’ names, with the senior holder’s name (and service address) first. The company normally sends the certificate to the senior holder. Other holders’ addresses are typically not printed on the certificate.
Company registers
Companies must record the joint holding in the register of members. All joint holders’ names go in the register, in the agreed order (senior first). Companies House treats each joint holder as holding the full shareholding.
This logic applies to the company’s people with significant control (PSC) filings. If joint share ownership exceeds 25% of voting rights, all joint owners must be included in PSC filings submitted to Companies House. For example, if two people hold 30% jointly, both are treated as controlling 30%.
How to make changes to joint shareholdings
You can’t convert joint shareholdings to individual shares (i.e. shares held in a single name). Instead, use the share transfer procedure to transfer the shares from the joint holding to a single shareholder.
To do so, all the joint holders of the share(s) must agree to the decision. Similarly, it is possible to convert individual shares to joint shareholdings using the same procedure.
Transferring shares
To transfer a jointly owned share, all joint holders must agree and sign the stock transfer form. No single holder can transfer the share without the others’ consent. This applies to any disposal of the share, such as selling or giving it away. When agreeing to transfers, the joint holders should ensure the senior holder’s name is listed first, as that determines the voting order.
Can you convert joint shares to individual shares or vice versa?
You can convert a joint shareholding into individual (single-name) shares by a normal share transfer, and vice versa, as long as all co-owners agree, there are enough shares to do so, and it is approved by the company. For instance, joint shareholders may transfer their shares so that each person holds some shares separately. Always check the company’s articles or any shareholders’ agreement first to ensure such changes are allowed.
What actions require agreement from all joint shareholders?
Most decisions must be agreed upon and signed by all joint holders. This may include establishing a dividend mandate or agreeing to receive company notices electronically. If shares are partly paid, any unpaid calls on the shares are owed jointly and severally by all joint holders.
How do you update company records for joint shareholdings?
The company (via its officers) must update official records whenever joint shareholdings change, in particular on its register of members. The company also needs to ensure that its PSC records are up to date – for example, if there is any increase or decrease in the joint holding, this may change the company’s PSC position and need to be reported to Companies House.
What happens if a joint shareholder dies?
On the death of one joint shareholder, the surviving co-owner(s) typically inherit the shares. The shares do not pass under the deceased’s will or intestacy rules – they’re automatically transferred to the remaining holder(s). If only one person remains, they become the sole shareholder. If two or more are still active, they must decide among themselves who will become the new senior holder and notify the company of that change.
The company must then update its records and documents.
Typical steps include:
- Entering the date of death on the register of members as the date on which the person stopped being a member of the company
- If applicable, updating the order in which the names of the surviving joint holders are listed in the register of members to reflect the new senior holder
- Update the company’s PSC information at Companies House if the deceased was also a person with significant control. This is done by submitting the Form PSC07 within 28 days.
- Cancelling the existing share certificate and issuing a new one with only the names of the surviving joint holders
- Obtaining a new dividend mandate (instruction for payment), if applicable
- Reporting the relevant changes to Companies House on the next annual confirmation statement, or earlier if preferred
As best practice, companies should ensure that the contact information for all joint holders – not just the senior – is kept up to date. This means that communications can reach a living shareholder if needed.
Understanding your role as a joint shareholder
Joint shareholdings can be a practical and flexible way to structure ownership in a UK limited company, provided everyone understands their responsibilities and the correct records are maintained. Ensure your company registers are up to date and that joint holders agree on how voting, communications and ownership changes will be handled.
If you have questions about how to manage joint shareholdings or need help setting up or structuring your company, we’re here to help. Explore our company formation services today and get expert guidance from 1st Formations.
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Comments (8)
I have a very small amount of BT shares jointly with my sister who lives abroad. How do we go about selling them? I presume I need paperwork signed that she is also happy to sell. Having extreme difficulty in dealing/logging on with Shareview (Equiniti).
Dear Mary,
Unfortunately, we cannot provide specific advice. The exact manner the shares will depend on how the shares are held (for example, whether a nominee holds those shares on your behalf, or are held directly in your joint names). Ultimately, this may be a matter you need to raise with Equiniti directly. I am sorry we could not be of more assistance.
Kind regards,
The 1st Formations Team
Hi,
What is the actual source, and where to find it, for ‘subscriber shares can’t be held jointly’?
Thank you for your comment Mick. Companies House interprets sections 7 and 8 of the Companies Act 2006 as requiring a subscriber to be a single natural person or a single corporate entity.
Kind regards,
The 1st Formations Team
Given only the senior shareholder can vote, is it only the senior shareholder that could put themselves forward to be voted as a Director or can all joint shareholders put themselves forward to be a Director?
Thank you for your kind enquiry, Carolyn.
In the first instance, it is not normally a requirement for a person to be a shareholder in order to qualify to act as director.
However, it’s possible you are referring to a company that has a “shareholder qualification” with respect to director articles. A shareholder qualification is a fairly standard provision that is sometimes included in a company’s articles of association or shareholders agreement, etc. It is designed to prevent someone who is not a shareholder from becoming a director. If that is the case with your company, we would suggest you first check the exact wording of the article in question, as it may define exactly what they mean by a shareholder (i.e. who meets the definition of the qualification).
Absent of such a definition, it is unfortunately not entirely clear whether it is just the senior holder who would meet the eligibility criteria of acting as director, so you may need to seek specialist advice on this.
We trust this information is of use to you.
Kind regards,
The 1st Formations Team
In case of death of senior holder, what is the proportion of right of remaining 2 surviver joint holders? Equal proportion of right between 1st jount holder and 2nd joint holder?
Thank you for your kind enquiry, Dr Mukesh.
As a general rule, each shareholder in a joint shareholding has an equal interest in that share. Whilst the person listed first in a joint shareholding (the so-called “senior” holder) is entitled to a few more rights (such as holding the right to vote), in other respects the holders could be seen as being equal.
We trust this information is of use to you.
Kind regards,
The 1st Formations Team