WHAT IS A SHARE?
Shares are a unit of ownership that represents an equal proportion of a company's capital, which entitles its holder to pro rata claim on the company's profits and an equal obligation for the company's debts and losses. Each share forms a unit of ownership of a company and is offered for sale to raise capital for the company. Section 567, Companies and Allied Matters Act, Cap C20 LFN, 2004 (CAMA) defines shares as “the interests in a company’s share capital of a member who is entitled to share in the capital or income of such company and except where a distinction between stock and shares is expressed or implied, includes stock.” For a company having a share capital, each member shall be a shareholder of the company and shall hold at least one share.1 A company has the power to issue shares up to the total number authorised in its memorandum, this is subject to any limitation and pre-emptive rights prescribed in the Articles of Association (“Articles”) of the company with respect to the number of shares which may be issued.
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