A company may, for commercial reasons, wish to alter its share capital. If authorised by its constitution, a company may alter its share capital in the following ways during a general meeting:
- Increase share capital by issuing new shares.
- Convert all or any fully paid up shares into stock.
- Reconvert stock 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 but the amount of share capital remains 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 remains unchanged.
- Cancel shares which have not been taken up or have been forfeited. This will diminish its share capital by the number of shares cancelled. As the law does not equate the cancellation of shares to a reduction of share capital, there is no need to comply with reduction of share capital procedures.
If your company wants to alter its share capital, you need to file the “Notice by Local Company of Alteration in Share Capital under S71” transaction via BizFile+.