Redenomination of share capital is allowed under Companies Act 2006. This applies to company limited by shares only. Your company is allowed to redenominate your share capital by passing a resolution. This includes any classes of your share capital into other currencies.
Before anything else, check your company Articles of Association for any clause relating to prohibition or restriction on redenomination of shares.
If no such clause then you are safe to proceed with your redenomination of share capital process with Companies House. To begin with, your company must use an appropriate spot rate of exchange. This must either be a rate prevailing on a particular day specified in the resolution or the average rate taken from each consecutive day of a period specified in the resolution. In any case, you must choose the day or period within 28 days ending on the day before the resolution is passed.
Consequently, you shall follow a three step route to calculate the new nominal value of each share in the class.
- First, take the aggregate total of the old nominal value of all the shares of that class.
- Then, translate that amount into the new currency at the rate of the exchange specified in the resolution.
- Afterward, divide that amount by the number of shares in the class.
Accordingly, you must deliver the form SH14 to Companies House within one month of your redenomination took place.
Your application must include:
- A copy of the special resolution.
- A statement of capital. It is to form part of the form SH14.
Disclosure of redenomination share capital in Companies House form SH14
You must disclose the following.
- First, the class of shares whether it is ordinary share or preference share etc.
- Second, number of shares redenominated.
- Third, existing nominal value of each share
- Lastly, new nominal value of each share.