Company Shares FAQs

Company shareholders are the owners of a company. Shares are allocated in proportion to the level of ownership that a person/company has in the new company. For example, if a company has 100 ordinary shares issued and Bill owns 50 of those 100 shares, then he owns 50% of the company. Conversely Susan who only owns 10 shares owns 10% of the same company.

All PTY LTD companies (the type registered through eCompanies) must have at least one owner having minimum 1 share, so you can’t skip the share allocation section.

The first thing to do is make sure that shares are allocated to each owner of the company in proportion to their level of ownership. For example if you have two people with one person owning 40% of the company and the other 60% then you may choose to reflect this by allocating 40 shares to the first person and 60 to the second. However 4 and 6 would also work, as would 400 and 600.

The second part is the amount paid per share. The amount paid for shares is given to the new company by the shareholders upon registration and is the initial capital of the company. If you have investors then you can reflect the amount they invest in the price they pay for the shares. However if there are no investors then it is common to keep the initial capital small, eg $10 or even as little as $1, in this case the amount paid per share would also be small.

Unpaid shares and share classes other than Ordinary are for advanced users.

If there is only one owner of the company, then a typical way of filling out the share allocation section is as follows:

Amount: 100
Class: Ord (Ordinary)
Paid per share: $0.01
Unpaid per share: $0

By making the number of shares 100 it gives you a bit of flexibility down the track if you want to sell part of the business.

Since a trust is not a legal entity it cannot directly own shares in a company. The trustee(s) of the trust must be listed as the owner of the shares for the benefit of the trust.

On our form you select the trustee(s) as the answer to the first question, ‘Who owns these shares?’. Then to indicate that the shares are being held for the benefit of the trust you then answer Yes to the question that asks “Are these shares held on behalf of another individual, organisation, trust etc?” You may then enter the name of the trust as the beneficial owner.

So for example the Jones Family Trust has Jones Holdings Pty Ltd as the trustee. Jones Holdings Pty Ltd is listed as the owner of the shares and by answering Yes to the last question ASIC is informed that Jones Holdings Pty Ltd is not holding the shares for its own benefit. By filling in the name of the beneficial owner we will list the owner of the shares on the share certificate as Jones Holdings Pty Ltd ATF the Jones Family Trust.

If you have joint trustees of a trust then all the trustees must be listed as joint owners of the shares, please contact to a support person for assistance.

Joint ownership of shares is typically only needed if an applicant wants shares held for the benefit of a trust that has joint trustees. In that case all the trustees of the trust have to be listed as the joint owners of a share bundle.

Joint ownership is disabled for standard accounts as the option confuses people who will incorrectly choose it when they really want individual holdings. To enable joint ownership you will either have to change your account to a pro account or get an eCompanies staff member to assist. Setting up a pro account is easily done and doesn’t cost anything. To do so:

• Save your current order by clicking on the Save Progress in the top right and creating your account if necessary
• Visit the Pro account signup page and fill in the form
• Then click on the Client Area page
• Reload your order by clicking on the edit link

You will now be able to choose multiple owners of a bundle of shares by ticking more than one box.