Authorised shares changes
Shares are the units into which the ownership interest in a profit company is divided.
Authorised shares are units of ownership in the company available to be issued to shareholders. Issued shares are the units of ownership already issued to shareholders. Record of issued shares must be kept at companies’ registered office.
Par value is a standard nominal value (for example R1) of which a share will be issued. No par value means that there is no standard value attached to the shares. The current Companies Act only make provision for companies to be registered with no par value shares. Companies registered before 1st of May 2011 with par value shares may still keep the par value until a special resolution is passed to convert it to no par value.
No, shares with a par value cannot be increased. The company will either have to convert it to no par value or create another class of shares with no par value. Subdivision of shares result in increase of shares which is not allowed.
The E-services service only make provision for reclassification into a single class of share at this stage. If the company is undertaking multiple reclassifications, such may either be submitted manually to firstname.lastname@example.org or may file additional share changes via the online service.
The shares will remain par value until a special resolution is passed by the shareholders to convert to no par value shares.
Yes, the Companies Act make provision for the outstanding shares to be issued.
The authorised shares have to be increased first which is not allowed for share with a par value. The Company have a choice to either convert the existing par value to no par value and then increase or create a new class of shares with no par value.
A resolution passed by the directors or special resolution approved by the shareholders, board report in terms of regulation 31(7). Note that the original documents and resolutions must be kept by the company and made available on request.
It is a resolution adopted with the support of at least 75% of the voting rights exercised on the resolution unless the company’s memorandum of incorporation requires a higher percentage.
Any amendments to the MOI must be done by a special resolution approved by the shareholders of the company. Changes of shares can be approved by the directors/board of the company.
The Companies Act requires that the directors of a company must prepare a report regarding the effect after the conversion of par value to no par value.
The report must contain the following information:
- State all the information that may affect the value of the securities affected by the proposed conversion;
- Identify the class of holders of the company’s securities affected by the proposed conversion;
- Describe the material effects that the conversion will have on the rights of the holders of the securities; and
- Evaluate any material adverse effects of the proposed arrangement against the compensation that any of those persons will receive in terms of the arrangement.
Issued shares (allotments) are no longer registered with the CIPC. Records must be kept by the company in the share register.
CIPC do not keep record of the shareholders neither the issued shares. Therefore share certificates must be drawn up by the company self although such is not mandatory in terms of the Companies Act, 2008.
See step by step guide on CIPC website www.cipc.co.za
- Conversion from par value to no par value,
- Increase of existing shares with no par value,
- Reclassification of existing shares with par value and with no par value shares,
- Decreasing of shares and
- Addition of new class of no par value shares
The relevant special resolution passed by the shareholders/directors of the company and the board report in case of conversion of shares from par value to no par value must be kept at the company and made available on request.
Multiple changes (or called actions) may be effected on the application to form a single transaction provided that the changes are captured in one session. And in such instances a single prescribed fee shall be payable.
There is no need for a MOI to be submitted to the CIPC when the resolution only refers to the increase of shares. When the rights of shares are effected by the change, such must then be inserted in the MOI which is kept by the company.
The share changes can be done online and the same special resolution can be scanned and emailed to email@example.com together with the required documents for adoption of MOI. Prescribed fee will be payable twice. Or the whole process can be done manually and billed once.
All active directors of the company that are reflected on the CIPC database will be notified that the change has been submitted PROVIDED that CIPC has the latest and correct cell number and email address on its records.
Only one director (or natural company secretary) who is mandated by the company to effect the necessary changes will receive the OTP and such person must be selected from the displayed list of active directors and natural company secretaries that will appear just before payment is done.
Maximum of 30 minutes. The sending of the OTP is dependent on the network load experienced by relevant cell phone companies at the time that it was sent.
CoR39 must be submitted in order to update such details on the profile of the director.
Log an enquiry on CIPC website www.cipc.co.za for assistance for a team member to confirm what contact details CIPC do have on record for the particular director or company secretary.
You may log an enquiry on CIPC website www.cipc.co.za for assistance, attached the proof of the latest registered resolutions for investigation and possible correction by CIPC.
According to section16 (9) of the Companies Act, 2008 the effective date of an amendment or change of the MOI, other than the change of name of a company, will be (i) the date on which the Notice of Amendment is submitted (registration date) or (ii) a later date (if any) as indicated on the Notice of Amendment. Therefore, although the resolution to change the shares may precede the date of submitting the change with CIPC, CIPC will affect the effective date as the date of registration of the Notice of Amendment. If the change is to be affected at a later date than filing, the change must be submitted manually and such is only applicable to company name changes and conversion from one type of company to another.
All active profit companies’ shares can be changed. Non Profit Companies and close corporations do not have shareholders and shares and therefore has not shares to change.