Limited Companies in the UK are generally limited by shares representing the ownership of the Company. So if the Company issued 100 shares and you own 1 – you own 1% of the Company. Shares come with certain rights, the most common type being an Ordinary share – which comes with 3 major rights:
- The right to vote in a shareholder/general meeting where 1 share equals 1 vote. If you own 51% of the issued shares, you have real power in the Company;
- The right to share in the winding up or sale of the Company where you are entitled to receive any money received in proportion to your shares.
- You have the right to receive profits from the Company in the form of dividends, so when there is a profit, the directors can vote for a dividend to be paid to the shareholders.