Share Capital, Ordinary Shares & Allotment of New Shares
A share is a security which represents a portion of the owner’s capital in a business.
Shareholders are the owners of the business and share the success or failure of the business.
Issued Share Capital, or more commonly known as Paid Up Capital is the total share capital issued to shareholders by a company and such shares have been fully paid by the shareholders to the Company.
A person who owns the shares that issued to him by a company, he shall be classified as shareholder of that particular company.
Ordinary shares give holders the rights of ownership in the company, such as the right to share in the profits, the right to vote in general meetings and to elect and dismiss directors.
Obligations of ownership are also conferred and this may result in the loss of an investor’s money if the company is unsuccessful.
Ordinary shares usually form the bulk of a company’s capital and have no special rights over other shares.
Allotment of Ordinary Shares / New Shares
The Company can at any time to increase its issued capital or paid-up capital by allotting new shares to existing or new shareholders.
Any request of allotment of new shares need to be approved by majority of existing shareholders. As such, an Extraordinary General Meeting (EGM) will be held to approve such motion.
The board of directors shall then be empowered or authorised by shareholders to allot new shares.