The Companies Act, 2013 earlier mandated that all Private Limited Companies have a minimum paid-up capital of Rs. 1 lakh. This meant that Rs. 1 lakh worth of money had to be invested in the company by purchase of the company shares by the shareholders to start the business.
A share capital may simply be defined as the amount of money invested in a company by its members in exchange for ownership of shares. A share capital is fundamental to businesses as it determines the extent of liabilities and dividends or profits that the shareholders are entitled to with respect to the company.
The share capital in a private limited company is the amount of money invested by its owners in exchange for shares of ownership. Company directors are typically shareholders in their own companies. Shareholders exercise certain powers over how the company is run.
Many private limited companies are quite small. There is no minimum capital requirement (other than at least one share must be issued on incorporation) and the initial share capital is commonly less than £100.
While under section 27(2) of the CAMA 1990, the minimum authorised share capital for a private company was N10,000 and for a public company it was N500,000, by virtue of section 27(2) of the CAMA 2020, a private company must have a minimum issued share capital of N100,000 while a public company must have at least N2 …
Increase in Share Capital
- Notice of increase in share capital in the prescribed form.
- Statement of increase in the prescribed form.
- Payment of Stamp Duty to Federal Board of Inland Revenue.
- Notice of increase to be signed by the company’s two directors or the secretary.
- Payment of filing fees.
- Article of Association of the Company must not restrict the right to make such allotment.
- Authorise capital of the Company must have the limit to allot the required shares.
- Name of the Allottee.
- Fathers Name of the Allottee.
- Full address with PIN.
- No of shares to be Allotted.
- PAN card copy of the person.
In the CAMA 2020, the requirement for companies to have an ‘authorized share capital’ has been replaced with a ‘minimum issued share capital’ principle. In the CAMA 2020 companies must have a minimum issued share capital of N100,000 for private companies and N2,000,000 for public companies.
A company limited by shares must have at least one shareholder, who can be a director. If you’re the only shareholder, you’ll own 100% of the company. There’s no maximum number of shareholders.
A company which does not have share capital is a company limited by guarantee. The profits that are earned are again re – invested.