2. INTRODUCTION OF SHARE CAPITAL
THE SHARE CAPITAL WILL BE ISSUED TO THE
SHAREHOLDER WHEN THE COMPANY IS THE FIRST SET
UP .
SHARE CAPITAL IS THE MOST COMMON WAY OF
DETERMINING THE OWNWERSHIP OF A COMPANY .
THE SHARE HOLDER ARE THE OWNWER OF COMPANY
.
PTO
3. THE TOTAL SHARE CAPITAL IS DIVIDED INTO SMALL PARTS
AND EACH PART IS CALLED A SHARE .
SHARE IS SMALLEST PART OF THE TOTAL CAPITAL OF A
COMPANY .
5. AUTHORIZED CAPITAL
IT ISTHE NOMINALVALUE OFTHE SHARES WHICH IS A COMPANY IS
AUTHORIZEDTO ISSUE BY ITS MEMORANDUM OF ASSOCIATION
IT ISTHE MAXIMUM CAPITALWHICHA COMPANY WILL HAVE DURING
ITS LIFETIME UNLESS IT IS INCRESED.
6. ISSUED CAPITAL
IT ISTHE NOMINALVALUE OF SHARES WHICHARE OFFEREDTOTHE
PUBLIC FOR SUBSCRIPTION
ISSUED CAPITAL <AUTHORIZED CAPITAL
ISSUED CAPITAL CAN NEVER EXCEED AUTHORIZED CAPITAL
7. CALLED-UP CAPITAL
CALLED UP CAPITAL –
• IT ISTHE PART OF ISSSUED CAPITAL WHICH HAS BEEN CALLED UP ONTHE
SHARE
• ONCE A SHAREHOLDER HAS PAIDTHE ISSUING ENTITYTHE FULL AMOUNT
OWED FOR ISSUED SHARES ,THESE SHARES ARE CONSIDEREDTO BE CALLED
UP
8. UN-CALLED CAPITAL
UN-CALLED CAPITAL –
• IT ISTHE REMINDEER OFTHE ISSUED CAPITAL WHICH HAS NOT BEEN
CALLED UP .
• THE COMPANY MAY CALLTHIS AMOUNT ANYTIME .
9. PAID – UP CAPITAL
PAID UP CAPITAL –
• IT ISTHE PART OF ISSUED CAPITALWHICH HAS BEEN PAID UP BYTHE
SHAREHOLDER.
• PAID-UP CAPITAL IS ONLY CREATED WHEN A COMPANY SELLS ITS
SHARES ONTHE PRIMARY MARKET DIRECTLYTO INVESTORS.
10. RESERVE CAPITAL –
RESERVE CAPITAL –
• IT ISTHAT PART OF UNCALLED CAPITAL OF A COMPANY WHICH CAN BE
CALLED ONLY INTHE EVENT OF ITSWINDING UP.
• THIS RESERVE CAPITAL IS AVAILABLE ONLYTOTHE CREDITORS IN CASE
OF LIQUIDATION OFTHE COMPANY.
