Presented by:Mr. Abdel mahmoud B.

M(SIU)

A limited company must have at least one share issued at the time of incorporation. These shareholders are called the subscribers. There is no maximum or minimum share capital and shares can be issued in any currency.

The share capital and issued shares will be stated in the Memorandum and Articles of Association. The shareholders liability is limited to the amount of share capital that they hold.

An example of a typical limited company share structure:-

A company may have an authorised share capital of 1000 that is made up of 1000 individual 1 shares. However there may only be 100 of these that are actually issued. These shares may then be equally divided between two shareholders who own 50 shares each.

The shareholder is the owner of the company and is responsible for appointing the director(s) of the company.

types of shares that may be issued

Ordinary - As the name suggests

these are the ordinary shares of the company with no special rights or restrictions. They may be divided into classes of different value.

Preference - These shares

normally carry a right that any annual dividends available for distribution will be paid preferentially on these shares before other classes.

Cumulative preference - These

shares carry a right that, if the dividend cannot be paid in one year, it will be carried forward to successive years.

Redeemable - These shares are

issued with an agreement that the company will buy them back at the option of the company or the shareholder after a certain period, or on a fixed date. A company cannot have redeemable shares only.