What nominal value should I use for my share class?

Short answer

If you're forming a new UK Ltd today, £0.01 (1 penny) is the most common nominal value. Some founders use £0.001 (a tenth of a penny) to allow finer share-count maths during funding rounds.

Why low nominal values

The nominal value is a legal anchor for share capital but rarely matches what shares are worth. Founders prefer low nominal values because:

• It lets you issue large round numbers of shares (e.g. 10,000) without burning a lot of subscription cash — £100 vs £10,000 at £1 nominal
• Premium accounts for the difference between price and nominal, so a £0.01 nominal share sold at £2.50 books £0.01 to share capital and £2.49 to share premium
• More flexibility on round maths (1,000,000 share cap tables are common in SaaS startups; £1 nominal would mean £1m of unpaid capital sitting on the balance sheet)

When to use £1

• Legacy companies incorporated before 2006 — many still have £1 nominal-value shares simply because that was the default
• Single-shareholder service companies — when there's no expectation of investors or option pools, £1 × 100 shares is perfectly fine
• Match the articles — your articles of association set the nominal value, so use whatever's in there. If you're changing nominal values mid-life, that requires a special resolution.

Important

Nominal value is not a valuation. A 1p nominal share can be worth £100 to an investor. The "value" of your company is determined by what you sell shares for in funding rounds (the share premium), not by the nominal value of the class.