Shares are symbols or percentage of ownership in a business. It is allotted to investors in exchange for equity capital. The shares of a company are owned by the shareholders who are also the owners of the business. It is advisable that shares are allocated with proper caution as shareholders are the owners of a company. It is also advisable that as shareholders, you have a shareholder's agreement to govern all actions, contributions, and benefits to individual shareholders.
Minimum share capital is the minimum amount of money the owners of a company or shareholders have invested in the company. This is represented by the shares the shareholders possess. The purpose of this capital is to make sure a company has enough equity to settle its creditors in the event of bankruptcy.
Most businesses have an industry-prescribed minimum share capital requirement in Nigeria and the Corporate Affairs Commission (CAC) notifies the public of these requirements. These are published on the CAC portal as well as that of the various regulatory agencies in charge of regulating these industries.
Industry and Corporate Affairs Commission prescribed minimum share capital
Generally, The Corporate Affairs Commission provides for a minimum issued share capital of N100,000 for private companies limited by shares and N2,000,000 for public companies limited by shares. It is also important to note that CAC requires that the shares in a company are issued at the point of registration.
The minimum share capital requirement of a foreign-owned company in Nigeria is One hundred million naira (NGN 100,000,000). This is in line with the revised handbook on expatriate quota administration 2022.
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