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

3/9/2022 3 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 required 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

RE-INSURANCE 10 Billion Section 9 (4), Insurance Act and Regulation 2003

PRIVATE SECURITY COMPANY/CONSULTANT- 10 Million

PENSION FUND/ASSET CUSTODIAN- 2 Billion Section 40 (2)(a) Pension Reform Act, 2004

CLOSED PENSION FUND-500 Million

PENSION FUND ADMINISTRATOR- 1 Billion

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 reducing 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. 

WRITTEN BY: CHAMAN LAW FIRM TEAM

E-MAIL: chamanlawfirm@gmail.com

Tel: 08065553671, 08024230080