Legal English – Peter’s Pills – Lesson 11

Legal English for Notaries - By Federnotizie

Shareholder, Member or Holder of shares?

Transcript:

There are many types of companies in the UK, but it is very important to be aware of at least two, namely a Private limited company (Ltd) (assimilabile alla S.r.l italiana) and Public limited company (Plc) (assimilabile alla S.p.a italiana). A Private limited company cannot be listed (quotata) on a stock exchange and the general public cannot trade (negoziare) its shares. A Public limited company, however, has the potential to be listed on a stock exchange, although the vast majority are not, and never will be, listed.

So, how should we use “shareholder”, “member” or a “holder” of shares in relation to theses two types of companies?

The UK Companies Act 2006 makes no distinction between a “shareholder”, a “member” or a “holder” of shares. So these three terms can be used interchangeably for both a Plc and an Ltd. They mean exactly the same thing. So those persons (persone giuridiche o fisiche) whose names appear in a company’s share register qualify as a “shareholder”, “member” or “holder” of shares for both Plc and Ltd companies.

And what about “quota holder”? Can this be used for a Plc or an Ltd? The answer is: preferably not, and never. Companies Act 2006 makes no reference to the term “quota holder”, and, therefore neither should you. This could actually (in realtà) only create confusion because a “quoted company” (società quotata) is a company which is listed on certain stock markets.

So, feel free to use “shareholder”, “member” or a “holder” of shares interchangeably, but please note that when we refer to the “founding members” of a Plc or Ltd company, and by this I mean those members who subscribed the memorandum of association (atto costitutivo) of the company, then we generally use the term “member” or “subscriber to the memorandum” to describe
these persons, and “initial shareholders” or “initial holders of shares” would be much more rare or uncommon.

Thank you, and see you next time for more Peter’s Pills to improve your legal English.


See more on the differences between a Ltd and a Plc here: https://askanydifference.com/difference-between-ltd-and-plc/

Legal English for Notaries - By Federnotizie

Legal English – Sommario delle Lezioni

Legal English – Peter’s Pills – Lesson 11 ultima modifica: 2021-06-09T08:30:09+02:00 da Peter Liebenberg
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