Must a company allot all its shares at incorporation?
A share can simply be explained as the power, rights, interest, and obligations that its holder have over a company. It is what determines the profit that a holder is entitled to in a company.
During incorporation, a company usually subscribes to a certain amount of shares as it deem fit. These shares are usually divided among the shareholders and the minimum number of shareholders for a company is two.
It is however not a requirement that a company must allot all its shares during incorporation. An allotment of shares is when a company issues its shares to an already existing shareholder or a third party.
In Nigeria, a company must allot up to 25 percent of the shares it subscribes to during incorporation. The remaining shares will be kept on reserve.
The advantages of this is that a company can use shares in reserve to raise funds, bring in investors, to convert loans to capital, etc
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