A company may, for commercial reasons such as appointing a new shareholder to raise more working capital, alter its share capital. A company may alter its share capital in the following ways;
- Increase share capital by issuing new shares
- Convert all or any fully paid-up shares into stock (paid-up capital)
- Reconvert stock (paid-up capital) into fully paid-up shares
- Consolidate and divide all or any of its share capital into shares of larger denominations. This means only the total number of shares is reduced by the amount of shares remain unchanged
- Subdivide all or any of its shares into shares of smaller denomination. This is referred to as a “share split”. The number of shares will increase but the amount of share capital does not change
- Cancel shares which has not been taken up or have been forfeited. This will diminish the share capital as the number of shares is canceled. Note that canceling of shares is not equal to reduction of share capital, which is only possible through a court order
Speak to us if you need to alter your share capital.