What are shares?

Shares represent ownership of a company.

A company needs to make a certain amount of shares available to current and future shareholders.

This is done during the company registration procedure and it is reflected on the company memorandum of incorporation.

When a company is registered these shares can be issued to the respective shareholders.

If a company has 100 000 authorized shares with 2 shareholders, each shareholder will own 50% of the company (50 000 shares each).

Even if at first both shareholders are issued with a total 100 shares (50 shares each).

Each shareholder will still own 50% of the company.

It is recommended that a company starts out with a high number of shares, so that it makes it easier when future shareholders join.

Expert Advice!