Ordinary Shares

This records the nominal value of ordinary shares issued by the company to its shareholders. As part of share capital it normally carries a credit balance, changing only when new shares are issued or existing shares are bought back.

Real-world examples

Small bootstrapped company

At incorporation, two founders each take one £1 ordinary share in cash. The entry is a credit of £2 to 3000 (Ordinary Shares) and a debit of £2 to 1200 (Bank). Because the share count is nominal and most funding into a company like this comes via directors' loan accounts rather than share capital, 3000 typically shows a tiny, static balance — £100 or less — for the company's whole life.

Company that's raised external investment

An investor puts £250,000 into the business for 2,500 new £1 shares. Only the £2,500 nominal value is credited to 3000; the remaining £247,500 paid above nominal value is share premium, recorded in a share premium account — a code that doesn't appear in this default chart, so most companies add their own. The full £250,000 is debited to 1200 (Bank).

Company buying back a departing shareholder's stake

When a departing shareholder's 1,000 £1 shares are bought back for £15,000, the entry debits 3000 £1,000 to cancel the nominal value, debits 3100 (Reserves) £14,000 for the amount paid above nominal value, and credits 1200 £15,000 for the cash paid out — an unusual debit movement on what's normally a credit-balance account.

Commonly confused with

Because code 3010 (Preference Shares) sits right next to this one in Capital & Reserves, it's a common mis-posting target. Code 3000 is specifically for ordinary shares, while 3010 covers preference shares — similar in nature, but keeping them separate is what makes the capital & reserves section of your management accounts meaningful rather than a single lumped total.

What a mis-posting here costs you

Because Ordinary Shares sits within equity, errors here don't touch trading profit for the year — but they do distort the split between share capital, reserves and retained earnings that shareholders and the Companies House filing rely on being accurate.

Other codes in Capital & Reserves