What is a company subscriber?

A subscriber is one of the initial shareholders in a private limited company. They are called subscribers because, as part of the company formation process, they subscribe to the company’s memorandum of association.

By adding their names to the memorandum of association, the subscribers agree to form the company and take at least one share in it. Even if they later cease their involvement with the company, the subscribers’ names will forever remain on the memorandum.

Anyone who becomes a shareholder of a company after it has been incorporated – whether through being allotted new shares or receiving shares from an existing shareholder via share transfer – will be shareholders, but not subscribers. Their names are not added to the memorandum of association, although they will be added to the company’s register of members.

So, while all subscribers are shareholders, not all shareholders may be subscribers.

Register a new company

Inform Direct makes it really easy to submit everything required to Companies House. All from just £28 inclusive.

Form a company

Every company must have at least one subscriber when it is formed, who may or may not also be a director or the company. Unless the company’s articles of association say otherwise, there’s no upper limit to the number of subscribers a company may have when it is incorporated. Subscribers can be individual people or corporate bodies, but it’s not possible for a joint shareholder to subscribe for shares when a company is first formed (although most companies allow shares to be held jointly after company formation).

The fact they subscribe to the company’s memorandum of association itself gives the initial subscribers no greater shareholders’ rights than those who become shareholders after the company has been incorporated. However, their involvement at the formation of the company means they may be in a position to influence the prescribed particulars attached to shares or the terms of any shareholders’ agreement. It’s often the subscribers that own the greatest percentage of shares in issue, which will give them significant influence over the decisions that the company makes.

What information do subscribers need to provide?

When forming the company, each subscriber will need to provide the following details:

  • Their full name (initials are not acceptable)
  • A contact address (which can be anywhere in the world)
  • The class(es) or type(s) of shares they are taking
  • The number of shares held in each class
  • The nominal value of their shares and the currency in which they are denominated

If the subscriber is a corporate entity, the full name and contact address of an officer authorised to act on behalf of the company must be provided.

Each subscriber, or an officer acting on behalf of a corporate subscriber, must also provide 3 unique personal details from a prescribed list:

  • Town of birth
  • Telephone number
  • Passport number
  • National insurance number
  • Mother’s maiden name
  • Father’s first name

These details take the place of a signature, confirming the subscriber’s agreement to form the company and to take one or more shares in it.

Do Companies House need to be informed if a subscriber’s details change?

If a shareholder changes their name, the new name will be reported to Companies House at the next confirmation statement (or annual return for periods up to 30 June 2016). Similarly, any updates to their shareholding (including any share transfers to or from the subscriber) must be reflected in the confirmation statement. While share transactions (other than transfers) must be reported to Companies House as and when they occur, it’s typically only changes in the share capital that are included – the names of shareholders whose shareholdings are being changed are not included.

There’s no need to tell Companies House, even at the next annual confirmation statement, if a subscriber changes their address (and the address of any new shareholders does not need to be reported to Companies House either). Neither do Companies House need to be informed if any of the 3 unique personal details change (e.g. if their telephone number changes).

Inform Direct is the innovative and easy way to manage a company's shares, make new share allotments, record share transfers and more.

Article Comments

  1. Gaurav Sood says:

    An Interesting question……….If all subscribers of capital sell or transfer their shares to another person…….Can we say that the Subscribed capital has become “Unsubscribed” ?? or Will the Company mention “NIL” against the subscribed capital in its balance sheet after such transaction ?? If Subscribed capital does not become “Unsubscribed” or “NIL” by act of transfer of sale will the transferees / buyers of shares deemed as “Subscribers” ??

    1. Philip Newman says:

      The subscribed capital is just the initial capital put into the company and then becomes just the company’s general capital that is transferred from shareholder to shareholder, increased by future allotments or even reduced by cancellations or share capital reductions. The subscribed capital is not a separate form of capital. The new holders of the shares on a transfer are not subscribers, as the subscribers are just the initial shareholders that subscribed for shares when the company was formed.

  2. Sreedevi Menon says:

    Can the subscribers to the Memorandum & Articles of Association pay for the shares later, i.e. after being alloted the shares

    1. Philip Newman says:

      Yes a company can issue shares nil paid to the subscribers. The subscribers are then legally required to pay the amount due when called by the company.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.