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What are Prescribed Particulars?

When starting the journey of company ownership, you might not be familiar with all the terms that are used. One of these terms is prescribed particulars, which, in itself, may not make much sense; however, they are simply the rights attached to the issued shares.

Prescribed particulars detail the shareholder's voting rights and any other entitlements they might have. Some companies can have slightly different particulars, depending on the class of shares issued to the shareholders.

When are prescribed particulars set?

Prescribed particulars are set out in the articles of association, which are set out when you first register your company with Companies House.

The majority of companies issue ordinary shares and adopt the structure of the Modern Articles, which is the default for Company Wizard. If this is the case in your business, then your prescribed particulars will include the following:

  • Dividend rights
  • Redeemable rights
  • Return of capital
  • Voting rights

These rights can be found in the following documents:

  • The Articles of Association
  • Company Resolutions; and
  • Any Shareholder Agreements

You may find that shareholders have very detailed and specific rights that can have a great degree of power and authority.

Although Company Wizard uses the model articles by default, you can supply your own if you'd prefer.

What do prescribed particulars do?

Prescribed particulars are purely informative and help shareholders understand what they are getting when they buy the shares. Think of it this way, you wouldn't buy shares without knowing what you're getting in return, just like you wouldn't buy a car without knowing the make, model, and any additional features.

Usually, prescribed particulars include:

  • Voting rights attached to each share
  • Rights to dividends or distributions
  • A right to participate in a return of capital
  • Whether the shares will be redeemed, or may be redeemed

Can I use a template to set out the prescribed particulars?

In short, yes. However, the longer answer is that you can use it to set out the wording and you must ensure that the finished document reflects your company and what you have set out in the articles of association.

You may find that the document is very different from the template when you're finished. This is OK and, in fact, is a good thing and you're showing that you are making them fit around your business.

Companies House gives some examples of the wording that can be used:

  • "each share is entitled to one vote in any circumstances" this wording will reflect the general legal position of one member one vote under section 284 Companies Act 2006;
  • "each share is entitled pari passu to dividend payments or any other distribution" this will reflect a basic right to dividends but any dividend must be made in accordance with the Companies Act and the company's articles of association; and
  • "each share is entitled pari passu to participate in a distribution arising from a winding up of the company" - any distribution from a company being wound up will therefore operate in accordance with the law.

If your company is using bespoke articles of association, or if you're unsure about what needs to be included, then you should seek legal advice.

Can Companies House reject them?

Companies House can reject your prescribed particulars if you haven't completed them or sent them in blank. They can also be rejected if the information isn't complete or if you point to a different document for more details. For example, Please see the articles of association for more details on rights" will mean your prescribed particulars will be rejected.

It is your responsibility to check that all details are correct and match the articles of association. Companies House will not check this, but it can be brought to their attention if someone lodges a complaint.

When do Companies House need my prescribed particulars?

You will need to submit your Prescribed Particulars after the following events:

  • An allotment of shares
  • If share capital if re-denominated
  • If shares are cancelled after the company purchases its own shares
  • When an unlimited company is converted to a limited company
  • When redeemable shares are redeemed
  • When shares are consolidated or subdivided
  • When the company's share capital is reduced

Companies House will hold the latest prescribed particulars that have been submitted by your company. If any changes have been made, you should update Companies House and include them with your Confirmation Statement.

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