Ordinary Share Capital

Limited Company TaxGlossary of Tax Terms
Ordinary share capital' represents the ownership stake in a limited company. It's the money originally invested in the company by its shareholders in return for shares.

Ordinary shares are the most common type of share issued by a company, giving holders ownership of the business.

What rights do ordinary shares have?

Holding ordinary shares typically gives the shareholder:

  • Voting Rights: The right to vote at company meetings, such as the Annual General Meeting (AGM).
  • Dividend Rights: The right to receive a share of the company's profits, distributed as dividends.
  • Rights to Capital: The right to a share of the company's capital if the company is wound up.

What is the 'Nominal Value'?

Each share has a 'nominal value' (e.g., £1 per share).
The total ordinary share capital is the number of shares issued multiplied by their nominal value.
This figure appears on the company's balance sheet and represents the core capital invested by the owners.

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