Under section 127 of the CAMA 2020, a company that wishes to increase its issued share capital simply passes a resolution approving the allotment of new shares to named persons.
Procedure for Increase in Paid up share capital of the private limited company
- First, assemble executive Meeting or Board Meeting for distribution of value offers and pass important determination for apportioning.
- Download Form 2 from MCA Site www.mca.gov.in.
- Fill Form 2 and attach rundown of allottee or List of Allottee.
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.
To issue shares in a company is to create new shares, and:
- All existing members are to agree to the issue of shares via a board meeting.
- You are to complete a return of allotment of shares via an SH01 form.
- Create board resolution, meeting minutes, and issue the share certificate(s) to the new shareholder.
The maximum number of Shareholders for a private company is 50 members. * Every company in Nigeria must have a registered office, an address where its register of members and debenture(s) are kept and a company secretary. * The minimum authorised share capital of a private company is N10,000 (Ten Thousand Naira).
Authority to allot new shares
Directors of companies with more than one class of shares need to obtain express authority to allot from the company’s shareholders. This is done by means of an ordinary resolution passed at a general meeting or using the 2006 Act written resolution procedure.
How can we increase the paid up capital of a private company under Companies Act, 2013?
It is required to provide Notice as per Section 101 of Companies Act,2013 to the shareholders of the company to hold the General Meeting and pass resolution to increase the Authorised Share Capital. It is required to file FORM MGT 14 within 30 days by the date of passing the special resolution to the registrar.
Issuing of extra shares will require a resolution to be passed by a general meeting of the company shareholders. The only way of avoiding diluting the company further by issuing shares to new investors is by existing shareholders taking up the extra shares on top of their own.
Conduct the extraordinary general meeting and obtain the approval of the shareholders to increase the authorized share capital on the time, date, and place that is mentioned on the notice. The approval of the shareholders to increase the authorized capital must be in the form of an ordinary resolution.
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.
Equity financing is basically the process of issuing and selling shares of stock to raise money. Investors who buy shares of a company become shareholders and can earn investment gains if the stock price rises in value or if the company pays a dividend.
Private limited companies are prohibited from making any invitation to the public to subscribe to shares of the company. Shares of a private limited company can also not be issued to more than 200 shareholders, as per the Companies Act, 2013.
As per the point of view of incorporation, there is no minimum capital required for incorporating a private limited company. As per company law 2013, you can start a private limited company with 0 paid-up capital.
How many directors can a private company have in Nigeria?
A private limited company can have a minimum of 1 director. A private limited company can have a minimum of 1 shareholder and a maximum of 50 shareholders.
Minimum of 3 directors is required to form a public limited company. A minimum share capital of Rs. 5 lakhs is required.