The money shareholders put into a company, broken down into the four labels that confuse most founders.
Who should read this: UK founders incorporating their first company, anyone looking at a balance sheet wondering what "called up share capital not paid" actually means, and founders preparing to issue new shares in a funding round.
Most UK founders understand what shares are. What confuses them is why the same money keeps showing up under different labels: issued, called up, paid up, share premium, and (sometimes) authorised. Each one means something specific, and getting the distinctions wrong can quietly cause problems years later when an investor's lawyer is reading your accounts.
Share capital is the money a company's shareholders have invested in exchange for shares. This guide explains each of the labels, walks through a worked example for a UK startup, covers how share capital appears at Companies House, and clears up the legacy authorised share capital question that still trips up founders running older companies.
The key labels you'll see, what each one means, and whether it still matters for new UK companies.
| Label | What it means | Still relevant? |
|---|---|---|
| Authorised share capital | A historical ceiling on the maximum amount of share capital a company could issue, written into its memorandum. | No, for companies formed after 1 October 2009. Abolished by Companies Act 2006. May still appear as a legacy provision in older companies' articles. |
| Issued share capital | The total nominal value of shares the company has actually issued to shareholders. | Yes, fundamental. |
| Called up share capital | The total nominal value the company has demanded shareholders pay for, whether or not they've paid yet. | Yes. |
| Paid up share capital | The portion of called up share capital the company has actually received. | Yes. |
| Called up share capital not paid | The bit that's been called for but not received. Sits as a receivable on the balance sheet. | Yes, you'll see this on annual accounts. |
| Share premium | Money received above the nominal value of shares (relevant whenever a company raises at a price higher than the share's nominal value). | Yes, sits in a separate share premium account, which is restricted. |
For a typical UK startup forming today and raising at a normal valuation, the four that matter are issued, called up, paid up, and (separately) share premium. Authorised share capital is a legacy concept you only need to worry about if you're working with a company formed before October 2009.
The one-line mental model. Share capital is the legal minimum nominal value of the shares your shareholders hold. Share premium is where almost all the actual investment money sits. Almost everything else is bookkeeping detail.
Share capital is the legal record of how much money (or other value, like IP or services) shareholders have committed to a company in exchange for shares. It's the foundation of company ownership, and every UK limited company has at least some.
Each share has a nominal value (also called face value or par value). This is the legal minimum that has to be paid up before the share is treated as fully issued. Most UK startups use a tiny nominal value, often £0.01 or £0.0001, because:
For comparison, public limited companies (plcs) have a £50,000 minimum allotted share capital. Most UK startups operate as private limited companies (Ltd) for years, so the plc minimum doesn't apply.
Nominal value has nothing to do with what your company is worth. Founders sometimes worry that a £0.0001 nominal value implies the company is "worth pennies". It doesn't. Nominal value is a legal accounting label, not a commercial valuation. A company with £10 of issued share capital can be worth £10m, or £10bn. The value sits in the share premium, the goodwill, and the underlying business. Not in the nominal value of the shares.
The total nominal value of shares the company has actually issued. If your company has issued 1,000,000 ordinary shares of £0.0001 each, your issued share capital is £100.
This is the headline number on Companies House and on the first page of your statement of capital. When investors ask "what's your share capital?", they almost always mean issued share capital.
The amount the company has formally asked shareholders to pay for. In practice, this just means whether the company has actually demanded the cash for the shares yet. For most UK startups, called up equals issued share capital because shares are usually fully paid up at the point of issue. But it's possible to issue partly paid or unpaid shares, where the company calls up only some of the money initially and reserves the right to demand the rest later.
If you've issued 1,000,000 shares of £0.0001 (issued share capital £100) and demanded payment for all of them, called up share capital is also £100. If you've demanded payment for only half so far, called up share capital is £50.
The amount actually received from shareholders against calls. If the company has called up £100 and shareholders have paid £100, paid up share capital is £100. If they've only paid £80 so far, paid up is £80 and "called up share capital not paid" is the remaining £20 (which appears as a receivable on the balance sheet).
For most UK startups raising in cash, called up = paid up. The only reason you'd see called up share capital not paid on the accounts is if shares were issued partly paid or there's a delay between allotment and the money landing.
The bit of a funding round that sits outside share capital itself.
When a company raises at a price higher than the nominal value of its shares, the excess goes into the share premium account, not into share capital. So if you issue 100,000 new shares at £1.00 each, with each share having a nominal value of £0.0001:
The share premium account is restricted by the Companies Act. It can be used for specific things like paying up bonus shares or writing off pre-incorporation expenses, but you can't generally pay dividends out of it without a court-approved capital reduction. Founders sometimes try and run into this restriction unexpectedly.
Two co-founders incorporate a new UK Ltd company. They each take 50,000 ordinary shares of £0.0001 nominal value at the start.
At incorporation:
Six months later, they raise a £200,000 SEIS round on a £2m post-money valuation cap. Using a simplified pricing approach based on the existing 100,000 shares, the new investor's shares are priced at £20 per share. This ignores the precise dilution maths from the new share issue, which is fine for the share-capital-flow point this example is making.
To raise £200,000, they issue 10,000 new shares at £20 each. Nominal value still £0.0001 per share.
After the round:
The share capital line at Companies House barely moves (£10 to £11). Almost the entire £200,000 sits in the share premium account.
This is a stylised illustration, not a real share allotment.
Short answer: only if you're running a UK company formed before 1 October 2009.
Before the Companies Act 2006 fully took effect (1 October 2009), every UK company had to specify an "authorised share capital" in its memorandum of association. This was a ceiling on the maximum number of shares the company could issue. To issue more shares than the authorised limit, you had to pass a special resolution to increase it first. It was a fiddly extra step that achieved very little in practice.
The Companies Act 2006 abolished the requirement for new companies. Any UK company formed from 1 October 2009 onwards has no authorised share capital and no ceiling on share issues unless its articles specifically include one.
For older companies, the old authorised share capital provisions transitioned into the articles of association as a default cap. Many founders running pre-2009 companies have inherited an authorised share capital limit they didn't realise was there. If you find one, it can be removed by ordinary resolution.
Three documents you'll meet:
A company's current statement of capital is publicly visible on the Companies House website. Investors will look at it before they wire money. Make sure yours is accurate.
For most early-stage UK startups, equity is still the right choice for the bulk of capital. Loans (including the British Business Bank's Start Up Loans) and grants (try YourGrantBuddy.com) play supporting roles.
Setting nominal value too high. Founders sometimes use £1 as nominal value because it feels "normal". This makes share splits and EMI option pool sizing awkward later. £0.0001 or £0.01 is fine and more common in UK startup practice.
Confusing share capital with shareholding percentage. Issuing 10,000 new shares to an investor doesn't tell you their percentage of the company. Always look at the percentage of total issued share capital.
Forgetting share premium is restricted. Founders sometimes assume the £200k of share premium is freely available to spend or pay out. The cash itself is part of the company's working capital and can be used to run the business, but legally the share premium account is a restricted reserve. You can't pay dividends out of it without a formal capital reduction process. This catches founders by surprise post-funding.
Ignoring authorised share capital legacy clauses. If you bought or inherited a pre-2009 company, check the articles for legacy authorised capital provisions. They can block share issues until removed.
Not filing SH01 within one month. Companies House gives you 30 days to file after an allotment. Late filings attract fines and can complicate the audit trail.
Getting nominal value reductions wrong. Reducing nominal value (e.g. splitting £1 shares into ten £0.10 shares to make EMI options easier) is a formal process requiring a special resolution and Companies House filing. Don't try to do it informally.
A founder who set up the company with sensible nominal values from day one, understands the difference between issued, called up, and paid up share capital well enough to read their own balance sheet, files SH01s within the 30-day window after every allotment, and treats the share premium account as restricted capital rather than spare cash. A founder running a pre-2009 company has also checked the articles for any legacy authorised share capital cap and dealt with it before raising.
Now you understand why raising £200k barely moves your share capital. Use the funding finder to map the angels, accelerators, and grants that fit your stage.
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This is general information, not financial, tax, or legal advice. Share capital, allotments, and Companies House filings have technical rules that matter. Always work with a UK-qualified solicitor or accountant when issuing shares, restructuring share classes, or dealing with capital reductions.