A subscriber is a founding member of a limited company. They are called ‘subscribers’ because they subscribe (add) their names to the memorandum of association during the company formation process. By doing so, they agree to form the company, become members, and have their names entered in the company’s register of members.
The subscribers of a company limited by shares are the initial shareholders. They may or may not also be directors. Each subscriber must agree to take at least one share when forming the company.
The subscribers of a company limited by guarantee are the initial guarantors. They may or may not also be directors. When setting up the company, each subscriber must guarantee a fixed sum of money.
The nominal value of these shares or guarantees determines the limit of each member’s financial liability to the company if it becomes insolvent and can’t pay its debts.
How many subscribers does a limited company need?
Per the Companies Act 2006, you need a minimum of one subscriber to set up a private limited company in the UK. This means you must have at least one shareholder to form a company limited by shares or one guarantor to set up a company limited by guarantee.
Is there a limit to the number of subscribers a company can have?
There is no statutory restriction on the total number of subscribers a company can have at incorporation, nor is there any limit to the number of shareholders or guarantors it can have after incorporation.
If a company wishes to impose any such restrictions, the members will need to alter the articles of association accordingly. To do so, they must pass a special resolution at a general meeting or in writing. A special resolution requires the agreement of at least 75% of members’ votes.
Who can be a subscriber?
Any individual person or corporate entity (e.g. another company) can be a subscriber or member of a company limited by shares or guarantee.
An individual (human) subscriber is referred to as a ‘natural person’. A non-natural subscriber is referred to as a ‘legal person’ or ‘corporate member’.
Can a company director also be a subscriber?
Shareholders and guarantors can also be appointed as directors during the company formation process. This is very common, especially in companies with only one or two members.
This flexibility means you can set up and run a limited company alone or with other people. You also have the option to bring in new business partners or appoint new directors at any time after incorporation.
What is the difference between a subscriber and a member?
Shareholders and guarantors are collectively referred to as ‘members’, regardless of whether they join a company during or after incorporation.
The term ‘subscriber’ only applies to the first (founding) members who join a company during the incorporation process and whose names are entered on the memorandum of association.
Can I be a subscriber of more than one company?
Yes, you can be a subscriber or member of more than one company at any given time.
Are subscribers’ details available to the public?
Companies House (the registrar) adds the names of all shareholders and guarantors to the public register of companies, whether the person becomes a member during or after incorporation.
Subscribers must also provide a contact address for Companies House. However, in a private company, there’s no need to tell the registrar if these address details change.
Furthermore, directors are responsible for entering the details of every shareholder or guarantor in the company’s statutory register of members. This register must be kept up to date and stored at the company’s registered office address or Single Alternative Inspection Location (SAIL address).
Shareholders and guarantors who become members of a private company after incorporation only have to provide address details to Companies House if they also qualify as a person with significant control (PSC).
Does Companies House have to be notified if subscribers’ details change?
Directors must notify Companies House when the following changes occur in relation to members of a private company:
- a new shareholder or guarantor joins the company
- an existing shareholder or guarantor leaves the company
- an existing member changes their name or shareholdings
These changes should be reported to Companies House on the next confirmation statement (previously called an annual return).
Alternatively, you can file an early confirmation statement if you want these changes to be reflected on the public register as soon as possible.
Can I update subscribers’ details on the memorandum of association?
The memorandum of association is a historical document that provides an overview of a company’s constitution at the time of its formation. As such, other than updating the company name (if applicable), you cannot make any changes to the memorandum after incorporation—even if the subscribers’ details change or they leave the company.
What is the liability of a limited company subscriber?
Shareholders and guarantors are protected by ‘limited liability’, which restricts their financial obligation to a company to a fixed amount. Shareholders are liable for the nominal value of their shares. Guarantors are liable for the nominal value of their guarantees. Typically, the nominal value of shares and guarantees is set at just £1.
Members are legally required to contribute the value of their shares or guarantees when the company ‘calls up’ these funds. Such requests are usually made when members join a company. However, some companies only call up share capital or guarantees when the funds are required to pay off business debts.
Thanks for reading
Please leave a comment below if you have any questions about this post. For more limited company guidance and small business advice, explore the Rapid Formations Blog.
Is it necessary that all the subscribers of moa need to be first directors?
Thank you for your kind enquiry, Shoib.
There is no requirement for the first subscribers of the company to also be directors. These two positions within a company are completely separate, although they can be held by the same people.
We trust this information is of use to you.
Regards,
The Rapid Formations Team
Thank you for this article. How much should subscribers guarantee? Do they typically also guarantee £1, or should it be a lot more?
Thank you for your kind enquiry, Pip.
In most cases, subscribers guarantee either £1 or £10 per shareholder, to keep things simple.
I trust this information is of use to you.
Regards,
Rachel
Thank you for your insight on subscriber , was really enlightening.
Thank you for your kind praise, Leonard. We’re glad you found this blog article informative.
Regards,
Rachel
Hi
Can a subscriber allot himself subscriber shares for free although the shares vave a nominal value
Thank you for your kind enquiry, Dutt.
If your company is being incorporated with the Model articles of association, these allow for the subscriber to be unpaid upon the incorporation of the company. The shares can be unpaid until the company requests payment or the shareholders decide to make payment. Should the company undertake any subsequent allotments of shares after the company has been incorporated, these shares will have to be paid for upon issuance.
I trust this information is of use to you.
Regards,
Rachel
Much obliged
I’m glad you enjoyed my blog, Mwiisa.
Kind regards,
Rachel
Can you add, change, or remove subscriber after the fact? If yes, would you modify the memorandum of association?
Thank you for your kind enquiry, Chris.
There is no mechanism to add, change or remove a subscriber after a company has been incorporated. The memorandum of association is a historic document which cannot be altered.
We trust this information is of use to you.
Kind regards,
The Rapid Formations Team
Can a subscriber share be paid up otherwise than in cash?
Dear David,
Thank you for your message.
Yes, subscriber shares can be paid up using non-cash methods such as in exchange for assets or shares in another company.
Best Regards,
Rapid Formations Team
Since the Memorandum of Association remains unchanged throughout the life of a company, can a founding subscriber, listed as such in the Memorandum of Association, be removed from the Register of Members by a vote of the Board or by the members at an AGM? Also, do different rules apply to a Company, Limited by Guarantee without a Share Capital?
Dear John
The Memorandum of Association is a historical document which can never be changed but the information in it can be changed as required by a company upon following the correct procedure for a change. The rules are not different for a Limited by Guarantee company.
Best Regards,
Can an unincorporated association (actually a registered charity that is not a company but has trustees) be a member of a compnay limited by guarantee?
Dear Jon
An unincorporated association can be a member of a Limited by Guarantee company.
Best Regards,
Please let me know How a subscriber of memorandum can leave the company in case the subscriber has a dispute with directors and want to free from any liability on his part.
Dear Harish,
We cannot advise on legal disputes such as this. I would advise that you look at the company’s Articles of Association which, if you do not have a copy, will be available on the Companies House Beta website. If this does not give the advice you require, I would suggest seeking the advice of a solicitor.
Best regards,
Rapid Formations Team.