Must a company allot all its shares at incorporation?

Must a company allot all its shares at incorporation?

June 14, 2019

A share can simply be explained as the power, rights, interest, and obligations that its holder have over a company. It is what determines the profit that a holder is entitled to in a company.

During incorporation, a company usually subscribes to a certain amount of shares as it deem fit. These shares are usually divided among the shareholders and the minimum number of shareholders for a company is two.

It is however not a requirement that a company must allot all its shares during incorporation. An allotment of shares is when a company issues its shares to an already existing shareholder or a third party.

In Nigeria, a company must allot up to 25 percent of the shares it subscribes to during incorporation. The remaining shares will be kept on reserve.

The advantages of this is that a company can use shares in reserve to raise funds, bring in investors, to convert loans to capital, etc

 

 

 

The information in this blog post (“post”) is provided for general informational purposes only, no information contained in this post should be construed as legal advice, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through this post without seeking the appropriate legal or professional advice from the particular facts and circumstances at issue from a lawyer. This post is protected by intellectual property law and regulations. It may however be shared using appropriate sharing tools provided that our authorship is always acknowledged and this Disclaimer Notice attached.

More Articles

Search

Connect With Us

Got any questions?

If you are having any questions, please feel free to ask.

Send us an email

Frequently Asked

  • Why must I file Annual Returns?

    It is a mandatory statutory requirement under the Companies and Allied Matters Act to file Annual Returns yearly. 

  • Do I need a Company Secretary?

    A limited liability company (LLC) must have a company secretary.

  • What is SON?

    SON stands for ‘Standards Organization of Nigeria’

  • Can I process/register multiple products at NAFDAC at the same time?

    Yes, you can process/register multiple products at the same time

  • How many directors do I need to start a company?

    A minimum number of two (2) directors is required to form a company.

  • Why do I need a trademark?

    You need to register your trademark because if you don’t register it, someone else can! It helps identify you as the source ad indicates a consistent level of quality of your products and services. Securing a registered trademark protects your brand, and provides you with tools to prevent someone else from using similar signs and riding off the back of your business.

Call Us Now on +234 901 719 0079 Whatsapp icon Chat on WhatsApp