Who owns the company.
WHAT A SHARE IS
A unit of ownership, carrying rights.
WHAT RIGHTS SHARES TYPICALLY CARRY
To vote To receive dividends To a share of assets on winding up
WHAT DIFFERENT CLASSES DO
Carry different rights: voting, dividend or otherwise.
WHY CLASSES ARE USED
To separate control from economic benefit, or to give investors different terms.
WHAT TO RECORD
Every share issued, to whom, when, and what was paid.
WHAT ALLOTMENT MEANS
Issuing new shares.
WHAT IT REQUIRES
Authority, per the constitution and the law A directors' resolution Filing, where required Updating the register
WHY FILING MATTERS
Unfiled allotments create uncertainty about ownership.
WHAT TRANSFER MEANS
An existing shareholder selling or giving shares to another.
WHAT IT REQUIRES
A transfer instrument Stamping, where applicable Approval, where the constitution requires it Registration in the register of members
WHY THE CONSTITUTION MATTERS
Many companies restrict transfers, requiring offers to existing members first.
WHAT TO CHECK BEFORE ANY TRANSFER
What the constitution permits.
WHAT DILUTION MEANS
Existing holdings falling as a proportion when new shares are issued.
WHAT TO ESTABLISH
Whether existing shareholders have rights to participate.
WHAT TO AVOID
Issuing shares without proper authority Verbal agreements about ownership Holding shares for someone else without documentation
WHY THAT LAST POINT
Undocumented nominee arrangements produce serious disputes.
