What are Prescribed Particulars?
You may have come across the term 'prescribed particulars' when you're incorporating your company or had other business owners ask you about it. But what are Prescribed Particulars?
The answer is probably more simple than you think. Prescribed Particulars detail the rights attached to shares which are issued, essentially spelling out the voting rights and entitlements to the owner of the share. Some companies can have slightly different particulars as it can depend on the class of share.
It is important that the particulars match the details you gave in the articles of association. 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 are there to 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 exact specs.
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, as the option of the company or the shareholder
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 you are using 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 are matched up with 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.