A share capital reduction using a SH19 is an allowed way for limited companies to reduce their share capital without the need to meet the requirements to purchase their own shares and immediately cancel them.  

Please note: Shares can be cancelled either as part of a share capital reduction or following a purchase of own shares. See the relevant guides for each process. Each scenario has its own benefits and use cases, but we can't advise on which approach to take.

It is also a method that allows companies to reduce share capital where the shares are not fully paid or by reducing the nominal value of a share class rather than cancelling shares.  

Whilst public limited companies can carry out a share capital reduction, they have to obtain a court order, private limited companies do not need to and can, instead of obtaining a court order, complete a share capital reduction supported by a solvency statement. To do this, private limited companies have to complete the following:

• Board approval to propose the share capital reduction
• Pass a special resolution approving the share capital reduction
• For the special resolution the directors need to make a solvency statement that, if the company intends to commence wind-up within twelve months of the date of the solvency statement, the company will be able to pay its debts in full within twelve months of the commencement of the winding-up or, in any other case, that the company will be able to pay/discharge its debts as they fall due during the year immediately following the date of the solvency statement.
• Within 15 days after the special resolution, the directors must make a compliance statement that the necessary solvency statement was made not more than 15 days before the date of the special resolution and was provided to the members before the passing of the resolution
• File at Companies House, within 15 days after the special resolution being passed, a copy of the special resolution, a copy of the solvency statement, a form SH19 and a copy of the compliance statement

Inform Direct produces the SH19 form and supporting documents for you to sign. You must submit these to Companies House yourself, either by post or using the Companies House upload service. Inform Direct cannot file SH19 forms electronically.

 A share capital reduction can be achieved by a variety of methods. See the guides linked below.

• SH19 For Limited Companies cancelling or repaying shares
• SH19 for PLC Companies wanting to cancel or repay shares
• SH19 For Limited Companies reducing the amount unpaid or the nominal value.
• SH19 For PLC Companies wanting to reduce the amount unpaid or the nominal value for shares.
• Where a share capital reduction is achieved by reducing amounts unpaid on shares, the share capital reduction process can only be used where the nominal value is also being reduced by at least the same amount as the reduction in unpaid amounts.  If either just the amounts unpaid are being reduced (ie unpaid share premium as opposed to share capital) or the amounts unpaid are being reduced by more than any reduction in the nominal value, the user will also need to make the change by changing the amounts unpaid in the share capital screen
• Where a combination of cancelling or repaying shares and reducing the nominal value is the method by which the share capital reduction has been achieved, then users will need to complete the share capital reduction flow twice, once for the cancellation/repayment and once for the nominal value reduction

How do I file my SH19 with Companies House?

The SH19 form cannot be filed electronically. Inform Direct will populate the paper form for you once you process it through the system.

The completed SH19 and supporting documentation can either be posted to Companies House or uploaded online. 

Note: Following any share reorganisation, it is often helpful to file a confirmation statement to provide an updated shareholder list to Companies House. Why might I file a Confirmation Statement early?