Share capital in a foreign currency and redenomination

A UK company’s shares can have a nominal value in any currency, and different classes can use different currencies. Existing shares can be converted from one currency to another by a members’ resolution under section 622 of the Companies Act 2006, followed by form SH14 at Companies House within one month. An optional small reduction of capital can then tidy up awkward nominal values.

Can a UK company issue shares in dollars or euros?

Yes. Section 542(3) of the Companies Act 2006 says shares in a limited company may be denominated in any currency and different classes may be denominated in different currencies. Each share must still have a fixed nominal value under section 542(1), such as US$1 or €0.01. A company can be formed with foreign currency shares, or can later allot a new class in another currency alongside its sterling shares, filing form SH01 within one month of the allotment as usual.

Common reasons include a parent group that reports in another currency, overseas investors who want their capital expressed in their own currency, or a company whose functional currency is not sterling.

Are there any limits?

For private companies there are no currency limits beyond what the articles say. Section 622(7) allows a company’s articles to prohibit or restrict redenomination, so check the articles first.

Public companies have one constraint. Section 765 requires the authorised minimum share capital, needed for a trading certificate or re registration as a plc, to be met either wholly by sterling shares or wholly by euro shares. Shares in any other currency are ignored for that test. The authorised minimum is £50,000 under section 763, and the Companies (Authorised Minimum) Regulations 2009 set the euro equivalent at €57,100. A plc whose capital is all in US dollars therefore still needs enough sterling or euro shares to meet the minimum. See minimum share capital.

What is redenomination and how does it work?

Redenomination converts existing shares from having a fixed nominal value in one currency to a fixed nominal value in another (section 622(1)). Section 617(4) lists it as one of the permitted ways of altering share capital. The rules are:

• Resolution. The members pass a resolution to redenominate all the share capital or any class. Section 622 does not specify the type, so under section 281(3) an ordinary resolution is enough unless the articles require more.
• Exchange rate. The conversion must use an appropriate spot rate specified in the resolution: either the rate on a stated day or the average of rates over a stated period of consecutive days. The day or period must fall within the 28 days ending on the day before the resolution is passed (section 622(3)).
• Conditions and timing. The resolution can set conditions, and takes effect on the day it is passed or a later day it determines. If the redenomination has not taken effect within 28 days beginning with the date of the resolution, the resolution lapses (section 622(4) to (6)).
• Calculation. Section 623 sets three steps for each class: total the old nominal values, translate that total at the specified rate, then divide by the number of shares in the class.

Section 624 says redenomination does not change members’ rights under the constitution, including dividend entitlements (even a right to dividends in a particular currency), voting rights and any liability for unpaid amounts. References to the old nominal value in agreements and documents are read as references to the new value.

What must be filed at Companies House?

Under section 625 the company must give notice to the registrar within one month of the redenomination, stating the date of the resolution and attaching a statement of capital showing the share capital as redenominated. Companies House guidance says this is done on form SH14, together with a copy of the resolution. Failure to file is an offence by the company and every officer in default. The statement of capital must show each currency separately.

How do you deal with awkward nominal values?

Translating at a market rate rarely gives round numbers. Section 626 lets the company reduce its share capital to reach more suitable nominal values, subject to strict limits:

• the reduction needs a special resolution passed within three months of the redenomination resolution;
• the reduction must not exceed 10% of the nominal value of the allotted share capital immediately after the reduction;
• it does not reduce any liability for unpaid share capital;
• the ordinary rules on reduction of share capital in Chapter 10 do not apply, so no solvency statement or court order is required.

Section 627 requires notice to the registrar within 15 days of the special resolution, with a statement of capital and a statement by the directors confirming the reduction is within the 10% limit. Companies House uses form SH15 for this. The reduction is not effective until the documents are registered.

The amount of the reduction goes to a redenomination reserve under section 628. That reserve can be used to pay up fully paid bonus shares, but otherwise it is treated as paid up share capital, so it cannot be paid out as a dividend.

How does a redenomination look in numbers?

Illustration only. A company has 1,000 ordinary shares of £1 each. Its US parent wants the capital in dollars. The members pass an ordinary resolution on 20 March to redenominate the ordinary shares into US dollars at the spot rate on 18 March, assumed for this example to be US$1.27 to £1.

1. Total old nominal value: 1,000 x £1 = £1,000.
2. Translated: £1,000 x 1.27 = US$1,270.
3. Divided by 1,000 shares: US$1.27 per share.

The company files SH14 within one month. To get a round US$1.20 per share, it passes a special resolution within three months reducing capital by US$70. After the reduction allotted capital is US$1,200, and US$70 is 5.8% of that, within the 10% cap. The directors’ statement and SH15 go to Companies House within 15 days, and US$70 is credited to the redenomination reserve.

What mistakes come up?

• Using a stale rate. A rate from more than 28 days before the resolution invalidates the process.
• Letting the resolution lapse. Conditions not met within 28 days mean starting again.
• Reducing by too much. The 10% limit is measured after the reduction, not before.
• Treating the reserve as distributable. It is treated as share capital.
• Forgetting the accounting and tax side. Redenomination is a company law change; the currency in which the accounts are prepared and taxed is decided separately. See foreign currency transactions in accounts and functional currency for corporation tax.

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Related Accountapedia entries

• Foreign currency and capital gains
• Accounting for foreign currency transactions
• VAT on invoices in a foreign currency
• Bookkeeping for foreign currency bank accounts
• Paying staff in foreign currency through PAYE

Sources

• legislation.gov.uk: Act 2006 c. 46, section 542
• legislation.gov.uk: Act 2006 c. 46, section 555
• legislation.gov.uk: Act 2006 c. 46, section 622
• legislation.gov.uk: Act 2006 c. 46, section 281
• legislation.gov.uk: Act 2006 c. 46, section 617
• legislation.gov.uk: Act 2006 c. 46, section 623
• legislation.gov.uk: Act 2006 c. 46, section 624
• legislation.gov.uk: Act 2006 c. 46, section 625
• GOV.UK: Life of a company part 2 event driven filings
• GOV.UK: Notify a redenomination of shares sh14

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 24 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.