Shares are the units into which the ownership interest in a profit company is divided. The share capital of a company is made up of the funds contributed by shareholders to the company in exchange for their shares in the company.
The new Companies Act, 2008 has changed the basis on which companies are capitalised. Shares issued in terms of the 2008 Act have no nominal or par value. The board must determine the price or other adequate considerations at which shares may be issued at the time of issuing the shares. In terms of the Companies Act, 1973 companies (also called pre-existing companies) were authorised to have no par value shares. Companies that do have no par value shares, after the implementation of the Companies Act, 2008 on 1 May 2011 –
- May not authorise any more or new par value shares; and
- May not increase or subdivide par value shares.
Companies with par value shares may convert their par value shares to no par value shares where after such may be increased or subdivided.
It should also be noted that only changes to authorised shares (shares that the company is authorised to issue) must be submitted to the CIPC. The Companies Act, 2008 does not require a company to submit information relating to the issuing of shares to the CIPC and therefore CIPC does not hold such information. It is the duty of the company itself to establish and maintain a securities register (or share register). For more information on the legal requirements on the establishment and maintenance of a securities register refer to section 50 of the Companies Act.
Any changes to shares, even increases or decreases of par value shares for all companies, requires the filing of a CoR15.2 since such authorized share information forms part of the company’s memorandum of incorporation.
Steps to change authorized shares online
Register as a Customer
To view information on how to register as a customer, click here. If you are already registered as a customer, and know your customer code and password, proceed to step 2.
Confirm that correct authorised shares reflect
Log onto the CIPC E-services website www.cipc.co.za / Online Transacting / E-services and logon using your customer code and password. Select Authorised Share Changes, type in the company registration number and view the displayed authorised share information.
If the displayed share information does not correspond to the records of the company, a ticket must be logged in order for the historical authorised share information to be reviewed and corrected. Click here to log an enquiry.
File change to authorised shares
To view the step-by-step guide on how to file changes to authorised shares, click here.
The following actions are authorised –
- Conversion of authorised shares from par value to no par value;
- Increase of authorised shares with no par value;
- Decrease of authorised shares with par value and no par value;
- Reclassification of classes of shares with par value and no par value; and
- Adding of new class of shares.
The processing changes of authorised shares is immediate and no further documents needs to be submitted to the CIPC to finalise the transaction. However all documents related to the change must be kept for future use. Also note that effective date is the date when the transaction is finalised/registered.