How to change authorised shares in South Africa
Estimated reading time: 1 minute and 40 seconds
This guide explains what authorised shares are, the legal requirements for amending them and the steps involved in filing these changes with the Companies and Intellectual Property Commission (CIPC). It also explains the impact on share capital, shareholder approval and tax implications.
Authorised shares refer to the maximum number of shares that a company is permitted to issue as stated in the company's Memorandum of Incorporation (MOI), and can only be changed through a formal amendment process. Authorised shares are not the same as issued shares — a company can issue shares up to the authorised limit but not beyond it without an amendment.
In South Africa, the Companies Act sets out the legal requirements for authorised shares. The number of authorised shares must be stated in the company’s MOI (Memorandum of Incorporation).
The Companies Act, No. 71 of 2008 sets out the legal framework for authorised shares in South Africa. According to the Act:
The number of authorised shares must be clearly stated in the company's MOI.
Any changes to this number require a formal amendment to the MOI.
Step 1: Log in with your CIPC customer code and password.
Step 2: Go to new eServices by clicking Transact.
Step 3: Click Authorised Share Changes and fill in the registration number of the specific company you want to change the authorised shares and click Validate. The correct company is displayed under Enterprise Detail and the correct share details are displayed under Current Shares. If the company is correct, click Agree and Continue.
Step 4: To increase or decrease the authorised shares, click Edit Share next to the desired share class and from the dropdown, select Increase or Decrease.
Step 5: Enter the new number of shares and click Validate and confirm and click Update.
Step 6: Once the changes have been captured, click Continue. Select the director or company secretary for OTP validation and click Continue. Once the OTP has been entered, click Validate.
Step 7: Select a payment option and click** Pay Now.**
A confirmation will be sent to the email address linked to the customer profile.
To change the authorised shares, a company must hold a shareholders’ meeting to approve the change where they pass a special resolution, and then file the change with the Companies and Intellectual Property Commission (CIPC) and pay the prescribed filing fee.
According to Section 65(9) of the South African Companies Act, No. 71 of 2008, the special resolution must be supported by at least 75% of the voting rights exercised on the resolution. However, Section 65(10) allows a company's MOI to specify a different percentage for approving special resolutions. Therefore, it's crucial to review your company's MOI to determine the exact approval threshold required for legal compliance.
When considering changing authorised shares, companies should keep in mind the impact on the company's share capital, the need to obtain shareholder approval and the potential tax implications.
Authorised shares are an important aspect of corporate governance in South Africa. Companies that are considering changing their authorised shares should carefully consider the legal and practical implications of doing so.
Once you have changed the authorised shares on CIPC, you can update your share records on InfoDocs. You can create and update company records with InfoDocs in minutes.
Please note: Changing your authorised shares with CIPC is not a service offered by InfoDocs. Please see our article here.
This guide explains what authorised shares are, the legal requirements for amending them and the steps involved in filing these changes with the Companies and Intellectual Property Commission (CIPC). It also explains the impact on share capital, shareholder approval and tax implications.
What are authorised shares?
Authorised shares refer to the maximum number of shares that a company is permitted to issue as stated in the company's Memorandum of Incorporation (MOI), and can only be changed through a formal amendment process. Authorised shares are not the same as issued shares — a company can issue shares up to the authorised limit but not beyond it without an amendment.
What are the legal requirements for authorised shares?
In South Africa, the Companies Act sets out the legal requirements for authorised shares. The number of authorised shares must be stated in the company’s MOI (Memorandum of Incorporation).
The Companies Act, No. 71 of 2008 sets out the legal framework for authorised shares in South Africa. According to the Act:
The number of authorised shares must be clearly stated in the company's MOI.
Any changes to this number require a formal amendment to the MOI.
How to Change Authorised Shares with the CIPC
Step 1: Log in with your CIPC customer code and password.
Step 2: Go to new eServices by clicking Transact.
Step 3: Click Authorised Share Changes and fill in the registration number of the specific company you want to change the authorised shares and click Validate. The correct company is displayed under Enterprise Detail and the correct share details are displayed under Current Shares. If the company is correct, click Agree and Continue.
Step 4: To increase or decrease the authorised shares, click Edit Share next to the desired share class and from the dropdown, select Increase or Decrease.
Step 5: Enter the new number of shares and click Validate and confirm and click Update.
Step 6: Once the changes have been captured, click Continue. Select the director or company secretary for OTP validation and click Continue. Once the OTP has been entered, click Validate.
Step 7: Select a payment option and click** Pay Now.**
A confirmation will be sent to the email address linked to the customer profile.
What are the legal requirements for changing authorised shares in South Africa?
To change the authorised shares, a company must hold a shareholders’ meeting to approve the change where they pass a special resolution, and then file the change with the Companies and Intellectual Property Commission (CIPC) and pay the prescribed filing fee.
According to Section 65(9) of the South African Companies Act, No. 71 of 2008, the special resolution must be supported by at least 75% of the voting rights exercised on the resolution. However, Section 65(10) allows a company's MOI to specify a different percentage for approving special resolutions. Therefore, it's crucial to review your company's MOI to determine the exact approval threshold required for legal compliance.
When considering changing authorised shares, companies should keep in mind the impact on the company's share capital, the need to obtain shareholder approval and the potential tax implications.
Authorised shares are an important aspect of corporate governance in South Africa. Companies that are considering changing their authorised shares should carefully consider the legal and practical implications of doing so.
Once you have changed the authorised shares on CIPC, you can update your share records on InfoDocs. You can create and update company records with InfoDocs in minutes.
Please note: Changing your authorised shares with CIPC is not a service offered by InfoDocs. Please see our article here.
Updated on: 04/03/2025
Thank you!