Issuing New Shares and Updating Shareholding

Reasons to Issue Shares

Companies issue new shares to raise capital, attract new investors, reward employees, or restructure ownership. Properly managing share issuance ensures legal compliance and protects the interests of existing shareholders.

Process Overview

1. Check the MOI and Shareholder Agreements
   • Verify if the current MOI allows issuing new shares.
   • Ensure pre‑emptive rights or other restrictions are followed.
2. Board and Shareholder Approval
   • Pass a directors’ resolution authorising the issue.
   • If required, get shareholder approval by ordinary or special resolution.
3. Valuation and Pricing
   • Determine the value of new shares. Use a professional valuation if needed.
4. Allot Shares
   • Allocate shares to new shareholders.
   • Prepare subscription agreements outlining the terms of purchase.
5. Issue Share Certificates
   • Create and sign share certificates.
   • Update the share register and issue share certificates to the new owners.
6. Submit Statutory Forms
   • File a CoR 10.1 (Change to Share Capital) or equivalent through CIPC.
   • Declare the issue in your next annual return.
7. Update Beneficial Ownership
   • Amend beneficial ownership declarations if holdings exceed reporting thresholds.
   • Inform CIPC within 10 business days.

Best Practices

Keep meticulous records of share transactions.

Engage legal and accounting professionals for complex share structures.

Communicate clearly with existing shareholders to maintain trust.