When completing the company formation process for a private company limited by shares, you will need to appoint a director, shareholder and person of significant control. But another term you may have come across is subscriber. Here we’ll explore what the subscriber is and how you go about appointing one.
You can’t appoint subscribers after the company formation
This is because subscribers are the company’s first shareholders. They are called subscribers because they subscribe to the company’s memorandum of association. This document outlines the subscribers’ intention to legally form and become part of the company, by taking shares in it.
All initial shareholders are subscribers. If you are forming a company with two shareholders, you can’t opt to have just one of them act as the subscriber. They are both shareholders and subscribers.
Any shareholder who joins the company after incorporation is simply known as a shareholder.
Does a subscriber’s share have more value than a shareholder’s share?
Provided the shares they hold are the same, no. The only difference is that the subscriber had an input in the company formation process, and so had a chance to impact any shareholders’ agreement or prescribed particulars attached to the shares.
Having said this, because the initial shareholders will be the founding members of the company, it is normal for them to issue fewer shares to any shareholders join once the company has been set up.
How do I appoint a subscriber?
To reiterate, the subscriber is the same as the shareholder – it’s just a shareholder at incorporation. So, when you are appointing your initial shareholders, you are also appointing your subscribers. To make these appointments you will need the following for each shareholder:
- Full name
- Share information; class of shares held, type of shares held and value of shares held
And there you have it, everything you need to know about the subscriber. Leave a comment if you have any questions and we’ll be happy to help.