This topic explains the different types of share issue and how they are handled within Company Secretary.
Share Issue - this is the issue of shares at nominal value or for a premium to new or existing shareholders. Click here for a step-by-step guide to setting up a Share Issue.
Bonus Issue - bonus Issues (quoted and unquoted) are a form of dilution of share capital, they are free distributions of shares i.e. are issued at no cost to the shareholder. For example, Shareholder may receive 1 bonus share for each 4 shares they currently hold. Click here for a step-by-step guide to setting up a Bonus Issue.
Rights Issue - rights Issues (quoted and unquoted) are a form of dilution of share capital. When a company makes a rights issue it allots shares to a shareholder by virtue of and in proportion to their existing shareholding and the shareholder pays for these rights. Normally the issue is at a discount to market value. Rights issues can be issued either by listed or unlisted companies. The difference between a rights issue and a bonus issue is that in a rights issue the new shares are paid for and this results in an adjustment to the original cost. Click here for a step-by-step guide to setting up a Rights Issue.
Scrip Issues - scrip or Stock Issues (quoted and unquoted) arise when a company paying a dividend gives its shareholders the option of taking the dividend in the form of new shares rather than cash. It is a form of bonus issue, as shareholders do not pay for the new shares. Click here for a step-by-step guide to setting up a Script Issue.
Share Splits - this is when the company decides to increase the number of shares in issue without changing the share capital total. For example 1 £5 share would be split into 5 £1 shares. Click here for a step-by-step guide to setting up a Share Split.
Share Consolidation - this is the exact opposite of a share split, where a company decides to reduce the amount of shares in issue without change the amount of share capital. For example 5 £1 shares would be consolidated into 1 £5 share. Click here for a step-by-step guide to setting up a Share Consolidation.
Firstly the share capital needs to be set up first. Click here for help on how to set up Share Capital. Once the share capital has been set up, it can be issued to the relevant shareholders. To do this an event must be created. Go to Edit | Share Register, click on the Events tab, this will bring up a list of events for the client for example, share issues etc. Clicking New will display the list of events that can be setup.
Go to Edit | Share Register | Events tab, click New, select Share Issue.
The New Share Issue screen opens, with the identifier and business name at the top of the screen.
Complete the Share Type field by selecting the drop-down menu listing all the types of share capital set for this client. Identify whether the share issue is subscriber shares by ticking the Subscriber box.
Authorised Capital - will show the amount of authorised share capital for this share type, this field will be greyed out as it is automatically filled in based on any linked transactions.
Currently Issued field - shows how many shares of the authorised capital are currently in issue, this field is also filled out by IRIS and is greyed out.
Number of Shares field - enter the total amount of shares that are to be issued, and the Issued Date. Clicking the magnifying glass will display a calendar allowing a date to be selected.
Payable Per Share box - enter the price that the shareholders are to pay per share.
Description - should automatically be filled out using the number of shares in this issue and the payable per share details. This can be changed as required.
Finally there is an option to log this information in the client history and therefore activate a completed Form 88(2). Once this screen has been fully filled out click Insert to save the changes or Cancel to close without saving.
Take up of Share Issue screen appears once Insert has been selected, this is where the issued shares are allocated to the particular shareholders.
Choose an IRIS client (one already setup on the IRIS basic database), an Other shareholder (click here for help on how to create an other shareholder) or an Existing shareholder.
In the Number of Shares field put the amount of shares that this shareholder received. Total Payable will automatically be calculated. Click Allocate and IRIS will allocate the next available share numbers, these can be changed if required. Put the amount that has been paid in the Total Paid box and the Date Paid, a calendar can be used by clicking the magnifying glass next to this field. Once completed click Post, a screen will appear called New Member (this will only appear if this is the first time that this shareholder has held shares in this client) this screen can be used to set up joint shareholdings and to choose whether this shareholder has waived their dividends. Click OK to this screen and the Take up of Share Issue screen displays again with the shareholding listed there. If there are other shareholders repeat the above process. The top of the screen identifies the number of shares that are to be issued and also what the total so far is. Click Close to exit out of the screen once all the shares are allocated, a screen will appear confirming the transactions generated, click OK.
Go to Share Register | Events tab, click New, select Rights Issue.
The New Rights Issue screen opens, with the identifier and business name at the top of the screen.
The rights issue screen should read as follows - for each number of shares that are share(s) of type held on a particular date has the right to buy a number of issued share(s) of type on a certain date at an amount per share.
Finally there is an option to log this information in the client history and therefore activate a completed Form 88(2). Once this screen has been fully filled out click Insert to save the changes or Cancel to close without saving.
Once Insert is pressed the event is displayed on the Events tab. In order to allocate the shares, highlight the rights issue and click View. From the Rights Issue screen click Take Up, a screen will appear asking “Do you want to simply allocate shares to all eligible members to 100% of their entitlement?”
Click Yes - then a Transactions Generated screen confirms the transactions generated by IRIS. Click OK and it returns to the Rights Issue screen. In order to view exactly what has been allocated click List.
Click No - then the Rights Issue Take Up screen appears. The screen lists all the current shareholders in this client, it shows how many shares they are entitled to and how many shares of this entitlement have been issued so far. The Add column is used to allocate shares to a shareholder. Just enter the amount of shares each shareholder is to receive in this column. In the column called On enter the date that the shares were allocated. Per Share should already have the amount to be paid per share in it, and finally the Total column will automatically be updated with the total amount that this shareholder should pay. Once this screen has been filled out click Apply, a screen will appear confirming the generated share transactions, click OK. In order to view exactly what has been allocated click List. If wanting to allocate further shares, select Take up to enter more transactions.
Go to Edit | Share Register | Events tab, click New and select Bonus issue.
The New bonus issue screen opens, with the identifier and business name at the top of the screen.
The bonus issue screen should read as follows - For each number of shares that are share(s) of type held on a particular date has the right to buy a number of issued share(s) of type on a certain date.
Any other information should be put into the Description box. Finally there is an option to log this information in the client history and therefore activate a completed Form 88(2). When finished inputting information, click Insert to save the changes or Cancel to close without saving.
Once Insert is pressed the following question appears, ‘Do you wish to make all implied share transactions now?’
Click Yes then a Transactions Generated screen confirms the transactions generated by IRIS. Click OK and it returns to the Bonus Issue screen. In order to view exactly what has been allocated click List.
Click No then the following question appears. ‘Confirm that you wish to generate any transactions not yet made’,
Click Yes then a Transactions generated screen confirms the transactions generated by IRIS. Click OK and it returns to the Bonus issue screen,
Alternatively, click No and the program returns to the Bonus issue screen without having allocated any shares.
If wanting to allocate the shareholders at a later point or reallocate due to having made some changes to other shareholding then ensure current transactions linked to the bonus issue are deleted.
To delete current transactions highlight the bonus issue in the Events tab, click View | List, if there is anything in this screen highlight each in turn and View then Delete.
To reallocate the bonus issue highlight the bonus issue in the Events tab, click View | Apply. The following question appears. ‘Confirm that you wish to generate any transactions not yet made’,
Click Yes then a Transactions generated screen confirms the transactions generated by IRIS. Click OK and it returns to the Bonus issue screen,
Alternatively, click No and the program returns to the Bonus issue screen without having allocated any shares.
Go to Edit | Share Register | Events tab, click New and select Scrip issue.
The New scrip issue screen opens, with the identifier and business name at the top of the screen.
A Scrip Issue is when a company offers their shareholders shares instead of cash for a dividend; this screen is similar to the New Dividends screen. (See How to create a new dividend on page 24 for details of the fields on this screen.)
Extra fields in this screen are:
Purchased Shares enter the share type that is being offered instead of cash
At … /share field is read as At a Price of £ Per Share, enter the price that is to be paid for each share.
Description is automatically completed with the detail entered in the above two fields. This information can be changed.
Finally there is an option to log this information in the client history and therefore activate a completed Form 88(2). When finished inputting information, click Insert to save the changes or Cancel to close without saving.
Once Insert is pressed the following question appears, ‘Do you simply want to allocate all shares to all eligible members to 100% of their entitlement?’
Click Yes - then a Transactions generated screen confirms the transactions generated by IRIS. Click OK and it returns to the Scrip issue screen. In order to view exactly what has been allocated click List.
Click No - then the Scrip issue take up screen appears. The screen lists all the current eligible shareholders in this client, it shows the dividend they are due (based on what has been created in the dividend tab), each members’ entitlement of shares and how many of these shares have been issued so far. The Alloc. column is used to allocate shares to a shareholder. Just enter the amount of shares each shareholder is to receive here. In the column called On, enter the date that the shares were allocated. Per Share should already have the amount to be paid per share in it, and finally the Total column will automatically be updated with the total amount that this shareholder should pay. Once this screen has been filled out click Apply, a screen will appear confirming the generated share transactions, click OK. In order to view exactly what has been allocated click List. If wanting to allocate further shares, access the Take Up option to enter more transactions.
If wanting to allocate the shareholders at a later point or reallocate due to having made some changes to other shareholding then ensure current transactions linked to the scrip issue are deleted.
To delete current transactions highlight the scrip issue in the Events tab, click View | List, if there is anything in this screen highlight each in turn and View then Delete.
To reallocate the scrip issue highlight the scrip issue in the Events tab, click View | Take Up. The following question appears, ‘Do you simply want to allocate all shares to all eligible members to 100% of their entitlement?’
Click Yes then a Transactions generated screen confirms the transactions generated by IRIS. Click OK and it returns to the Scrip issue screen. Alternatively, click No and the program enters the Scrip issue take up screen without having allocated any shares.
Go to Edit | Share Register | Events tab, click New, select Share consolidation.
The New consolidation screen opens, with the identifier and business name confirmed at the top of the screen. All the share types created against the company are listed on the left and right hand side of the screen. If a new share type is needed, click Add type and enter the relevant details. Share qualifying for consolidation. Enter the number of shares that are being consolidated against each share type that this event is related to. The Disc. column is to identify if the share type is discontinued once consolidated. Enter the number of New shares that are being generated by the consolidation against the relevant share type. There is also the option to enter an amount of cash that may be paid for each consolidating unit. Enter the date that the consolidation took place and the date that the resolution was passed. Finally there is an option to log this information in the client history and therefore activate a completed Form 122. When finished inputting information, click Insert to save the changes or Cancel to close without saving.
Once Insert is pressed the following question appears, ‘Do you wish to make all implied share transactions now?’ Click Yes then a Transaction generated screen confirms the transactions generated by IRIS. Click OK and it returns to the Consolidation screen. In order to view exactly what has been allocated click List. Click No then the following question appears. ‘Confirm that you wish to generate any transactions not yet made’,
Click Yes then a Transaction generated screen confirms the transactions generated by IRIS. Click OK and it returns to the Consolidation screen,
Alternatively, click No and the program returns to the Consolidation screen without having allocated any shares.
If wanting to automate the deletion and allocation of shares to the shareholders at a later point due to having made some changes to other shareholdings then ensure current transactions linked to the consolidation are deleted. To delete current transactions highlight the consolidation in the Events tab, click View | List, if there is anything in this screen highlight each in turn and View then Delete. To automate the transactions for the consolidation highlight the consolidation in the Events tab, click View | Apply. The following question appears. ‘Confirm that you wish to generate any transactions not yet made’
Click Yes then a Transaction generated screen confirms the transactions generated by IRIS. Click OK and it returns to the Consolidation screen.
Alternatively, click No and the program returns to the Consolidation screen without having allocated any shares.
Go to Edit | Share Register | Events tab, click New, select Share split.
The New Share split screen opens, with the identifier and business name confirmed at the top of the screen. The new share split screen should read as follows – Every number of shares that are shares of type, held on a particular date will be split into new shares as itemised below (on that date). At the bottom of the screen insert the number of shares created by the share split. Also complete the date of resolution to split the shares and the amount of any cash consideration per original share if applicable. For Original share type discontinued after split, select the option if true. Finally there is an option to log this information in the client history and therefore activate a completed Form 122. When finished inputting information, click Insert to save the changes or Cancel to close without saving.
Once Insert is pressed the following question appears, ‘Do you wish to make all implied share transactions now?’ Click Yes then a Transaction generated screen confirms the transactions generated by IRIS. Click OK and it returns to the Share split screen. In order to view exactly what has been allocated click List. Click No, the following question displays. ‘Confirm that you wish to generate any transactions not yet made’.
Click Yes then a Transaction generated screen confirms the transactions generated by IRIS. Click OK and it returns to the Share split screen, alternatively, click No and the program returns to the Share split screen without having allocated any shares.
If wanting to automate the deletion and allocation of shares to the shareholders at a later point due to having made some changes to other shareholdings then ensure current transactions linked to the share split are deleted. To delete current transactions highlight the share split in the Events tab, click View | List, if there is anything in this screen highlight each in turn and View then Delete. To automate the transactions for the share split highlight the share split in the Events tab, click View | Apply. The following question displays, ‘Confirm that you wish to generate any transactions not yet made’,
Click Yes then a Transaction generated screen confirms the transactions generated by IRIS. Click OK and it returns to the Share split screen.
Alternatively, click No and the program returns to the Share split screen without having allocated any shares.