Updated: Jun 22, 2020
When talking about funding your company, or your need new capital to be injected to your company, usually your company secretary will advise you by means of Share Allotment, because it is simple, straightforward and easy to arrange. Yet, some of the time, we don’t want to increase the number of shares, perhaps because of certain shares restriction, shareholding portion balance, you want the money but not sacrificing the shareholding power, or simply to make the value per share looks better.
Common scenarios of Alternation of Share Capital
Capitalize on the company’s profit
When the company making profits, despite distribute them as dividends, or leaving them as surplus cash, another choice would be capitalized them; one of the reasons is to allow the company ready to guarantee a loan from the bank for the later-on expansion plan.
Subsequent investor’s injection
Starts-up often needs several stages of injection of funds when approaching the investors, of course, each stage should be guided by clearly defined milestones, while for certain sta