How do company shares work?

The division of shares in a company in the UK determines two very important factors:

1. The amount of control each shareholder has over the company, and
2. The percentage of profit received by each shareholder.

If a shareholder has more than 50% of the share capital they are said to have a 'controlling interest'.

If someone is issued with a share, this shareholder must be issued with a Share Certificate once they have paid the company the value of the share.

When there are two or more people involved in a company, it's typical that a shareholders' agreement - which defines the roles, responsibilities and relationships of a group of shareholders - is created so that everyone knows where they stand.

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