3. Authorised Capital
The authorised capital is essentially the number of shares of a particular share class that the company may issue to shareholders. As a rule, one cannot issue more shares than the number stated as authorised share capital. The authorised share capital has to be specified in the MOI. This will include the types of share, what rights, preferences and limitations are attached to each share etc.
Regulation 31(2) provides that a pre-existing company cannot authorise any new par value shares or shares that have a nominal value. If there are any shares of par value with no shares in issue these shares may not be used and would need to be converted in terms of Regulation 31(3) by completing form CoR 31 and submitting a director’s resolution.