Issuing shares for cash

Always take legal advice if it is proposed to issue new shares. The procedures have to be followed strictly or the issue may be unlawful.

Click here to see a flowchart setting out the necessary steps when issuing shares for cash. The flowchart assumes the issue is by a private company, and that the people to whom the shares are to be issued will pay for them in cash.

The rules are significantly different if:

• A shareholder is to pay for shares by transferring assets to the company.
• The issue is a bonus issue (in which the company uses its reserves to pay for the shares, so the person to whom they are to be issued doesn't have to pay for them).
• The issue is of shares in an employees' share scheme.
• The issue is by a public company.

Contact us for advice in any event.