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Aggregate amount paid for shares

What is the aggregate amount paid and why does it matter?

The Companies Act 2006 defines what a company with shares needs to show on its register of members (ie shareholders).  This includes name and address, membership start date (and end date if they are no longer a shareholder) and details about the shares they own.

Section 113(3)(b) also states that the register should show “the amount paid or agreed to be considered as paid on the shares of each member.”  This is known as the aggregate amount paid.

What does this mean?  The aggregate amount is the total amount paid for the shares – i.e. nominal amount + share premium – to the company.  Therefore the register is required to show what was paid for the shares when they were first issued.  If the shares were partially paid when first issued, and then additional payments have been paid, the company is required to update the registers as those additional payments are made – to keep the registers up to date and accurate.

Because the requirement is to show the amount paid for the shares when first issued, but also to show that against each shareholder in the register, what happens when shares are transferred?  Two things: (i) the amount paid for the shares when transferred is not relevant here – that is a payment between the transferee and transferor, not the company. (ii) the amount paid should move from the transferor’s entry in the register to the transferee’s entry – as the shares now belong to them.  This means that the company is required, in essence, to identify how much was paid to the company for each share the shareholder owns.  Even if that means going back through multiple shareholdings to find the ‘source’ share issue.

e.g.

  • A paid £100 (nominal and premium) for 100 shares issued to him.
  • A transfers 50 shares to B for £3,000.
  • Assuming they have no other shares, the aggregate amount paid for the shares by each shareholder should show in the register as £50 for A and £50 for B.
  • B is then issued 60 shares for £2,500 (nominal and premium).
  • The aggregate amount paid for the shares by each shareholder should show in the register as £50 for A and £2,550 for B. And so on.

 

 

The aggregate amount paid showing in the register of members is not correct.  Why & how do I fix it?

Kudocs is able to provide the aggregate amount paid for any shares issued after the company joined Kudocs and are recorded in Kudocs.  This is what is shown in the line “Agg. amount recorded as paid in Kudocs:” (Shareholder page > scroll down to Shareholding info > {Edit shareholding info}).  For more info, see here.

However, this may not be the full total or accurate as Kudocs does not know the aggregate amount paid for shares issued before joining Kudocs (see the explanation above).  Therefore Kudocs does not automatically show this in the registers, so the value in “Agg. amount paid shown in register:” may not be correct.  You need to confirm the amount to show on the register, taking into consideration the aggregate amount paid to the company for all the shares held by the shareholder – both recorded in and outside of Kudocs.

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