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WHAT ARE THE PRESCRIBED SHARE CAPITAL FOR COMPANIES IN NIGERIA
All you need to know about share capital for companies in Nigeria.
CHAMAN LAW FIRM
5/11/20243 min read
WHAT ARE THE PRESRIBED SHARE CAPITAL FOR COMPANIES IN NIGERIA
A share capital may simply be defined as the amount of money invested in a company by its members in exchange for ownership of shares. A share capital is fundamental to businesses as it determines the extent of liabilities and dividends or profits that the shareholders are entitled to with respect to the company. Also, many regulators, (for instance, the Central Bank of Nigeria), have set minimum thresholds for the share capital of companies which they regulate and companies whose share capital do not meet those thresholds will not be allowed to do business within the industry.
The Companies and Allied Matters Act, 1990 (the “CAMA 1990”) did not make any provision for the definition of the share capital of a company as it was deemed as the company’s authorized share capital. An authorized share capital refers to the maximum number of shares a company is allowed to issue to its shareholders based on its memorandum of association. The CAMA 2020 on the other hand, specifically defines a share capital as the issued share capital of a company at a given time. This provision implies that the share capital of a company includes only shares that have been issued to its members and that companies no longer have the discretion to leave some of their shares unissued as was provided for in the CAMA 1990.
Therefore, unissued shares will not be counted when determining a company’s share capital and companies can no longer reserve a percentage of their share capital for future investors, employee share options scheme or other purposes. The implication of the current position is that companies intending to allot new shares in the future will now be requirgb(255, 0, 0) to increase their share capital to create new shares at the relevant time(s).
PRESCRIBED MINIMUM SHARE CAPITAL FOR DESIGNATED COMPANIES IN NIGERIA
ISSUING HOUSE- 200 Million
BROKER/DEALER- 300Million
TRUSTEE- 300 Million
FUND/PORTFOLIO MANAGER-150 Million
. STOCK BROKER- 200 Million
STOCK DEALER- 100 Million
CORPORATE INVESTMENT ADVISER (REGISTRAR)-150 Million
CORPORATE INVESTMENT ADVISER - 5 Million
INDIVIDUAL INVESTMENT ADVISER- 2 Million
MARKET MAKER- 2 Billion
CONSULTANT (PARTNERSHIP)- 2 Million
CONSULTANT (INDIVIDUAL) -500,000
CONSULTANT (CORPORATE)- 5 Million
UNDERWRITER- 200 Million
VENTURE CAPITAL MANAGER -20 Million
COMMODITIES BROKER-40 Million
CAPITAL TRADE POINT- 20 Million
RATING AGENCY- 150 Million
CORPORATE/SUB BROKER- 5 Million
COMMERCIAL BANK WITH REGIONAL AUTHORIZATION-10 Billion
COMMERCIAL BANK WITH NATIONAL AUTHORIZATION-25 Billion
COMMERCIAL BANK WITH INTERNATIONAL AUTHORIZATION-50 Billion
MERCHANT BANK -15 Billion
MICRO FINANCE BANK (UNIT)-20 Million CBN Regulation
MICRO FINANCE BANK (STATE & FCT)-100 Million
MICRO FINANCE BANK (NATIONAL)- 2 Billion
PRIMARY MORTGAGE INSTITUTION- 2 Billion
FINANCE COMPANY-20 Million
BUREAU DE CHANGE-35 Million
NON INTEREST BANK (REGIONAL)-5 Billion
NON INTEREST BANK (NATIONAL)-10 Billion
INSURANCE BROKER-5 Million
LIFE INSURANCE-2 Billion
GENERAL INSURANCE- 3 Billion Section 9 (4), Insurance Act and Regulation 2003
LOTTERY 5 Million Section 2 (1), National Lotteries (Amendment) Regulation, 2007
AIR TRANSPORT (INTERNATIONAL)-2 Billion Nigerian Civil Aviation Authority
AIR TRANSPORT (REGIONAL)-1 Billion
AIR TRANSPORT (LOCAL) 500 Million
AIR AMBULANCE/FUMIGATION/ PRIVATE JET- 20 Million
AVIATION (GROUND HANDLING SERVICES)- 500 Million
AVIATION (AIR TRANSPORT TRAINING INSTITUTIONS)-2 Million
AGENTS OF FOREIGN AIRLINES-1 Million
AGRICULTURAL SEEDS, PRODUCTIONS, PROCESSING, MARKETING- 10 Million NASA Cap 5, LFN,2004
SHIPPING COMPANY/AGENT -25 Million NIMASA Guidelines for Registration
CABOTAGE TRADE-25 Million
LIFE MICRO-INSURANCE- 150 Million
GENERAL MICRO- INSURANCE- 200 Million
FREIGTH FORWARDING 5 Million
MICROFINANCE BANK (TIER 1 UNIT)-100 Million
MICROFINANCE BANK (TIER2 UNIT)-35 Million
MICROFINANCE BANK (STATE & FCT)-500 Million
MICROFINANCE BANK (NATIONAL)-3.5 Billion
58. PAYMENT SERVICE BANK- 5 Billion
59. LIFE INSURANCE- 2 Billion
GENERAL INSURANCE-3 Billion
COMPOSITE INSURANCE-5 Billion
RE-INSURANCE-10 billion
A company can comply with section 124 of the CAMA 2020 by allotting the unissued part of its share capital to its existing shareholders or new shareholders, or by rgb(255, 0, 0)ucing its share capital to the amount already issued, provided they meet the minimum share capital requirement. The process of allotment must be done in accordance with the provisions of the CAMA 2020, the Regulations and other regulations of other relevant regulatory bodies.