CAC Share Allotment in Nigeria: Share Capital Threshold, Procedure, and Compliance
Guide to share capital threshold and company registration in Nigeria, foreign participation rules, allotment of unissued shares, the procedure for allotment of shares in a private company, increasing share capital, return of allotment, CAC circular on allotment, and annual returns filing with the Corporate Affairs Commission under the Companies and Allied Matters Act.
Share allotment is how a company creates or redistributes ownership. In Nigeria, that process sits under the Companies and Allied Matters Act 2020 and is recorded with the Corporate Affairs Commission, the Nigerian corporate registry. Whether the task is company registration in Nigeria, increasing share capital after incorporation, or clearing historical unallotted shares, the same principles apply: shares must be properly issued, allotted to named persons, paid up to the required extent, and reported on time.
We set out the current framework for private company practice, the share capital threshold that applies at registration, the special position of foreign participation, the procedure for allotment of shares, the return of allotment, and how share changes interact with annual returns filing.
Share Capital Threshold for Company Registration in Nigeria
Under the Companies and Allied Matters Act, share capital means issued share capital. The older idea of a large authorised capital, of which only a fraction had to be issued, no longer applies. A company pays stamp duty and Corporate Affairs Commission fees on the capital it actually issues, and it is expected to allot those shares rather than leave a pool of unissued shares on the register.
Minimum Share Capital Under CAMA
Section 27 of the Companies and Allied Matters Act sets the statutory floor:
- A private company must have a minimum issued share capital of ₦100,000.
- A public company must have a minimum issued share capital of ₦2,000,000.
These figures are a baseline only. Banks, insurers, capital-market operators, payment businesses, and other regulated entities face much higher sector thresholds set by their own regulators. A company that registers at the CAMA minimum and later enters a regulated activity will usually have to increase capital before it can obtain the relevant licence.
At least 25 percent of issued share capital, including any increase, must be paid up for an increase to take effect. Directors are expected to be in a position to confirm that this paid-up condition is met.
Share Capital Threshold and Foreign Participation
Company registration in Nigeria with foreign participation is subject to a higher share capital threshold than the ordinary private-company minimum. Following the Revised Handbook on Expatriate Quota Administration, the expected minimum for a company with foreign participation is ₦100,000,000 issued share capital. The Corporate Affairs Commission has applied this threshold to new incorporations and has required existing foreign-participated companies below that level to increase capital before post-incorporation filings are processed in the ordinary way.
The ₦100 million figure is not a substitute for sector rules. A foreign-owned bank, insurer, or capital-market firm must still meet the higher capital set by the Central Bank of Nigeria, the National Insurance Commission, or the Securities and Exchange Commission. Capital may be contributed in cash or, where the relevant rules allow, by the value of qualifying imported equipment, but stamp duty and filing fees are still calculated on the issued amount. Foreign investors should also plan for Nigerian Investment Promotion Commission registration and, where expatriate staff are required, a business permit and expatriate quota. Those permits are routinely refused where the share capital threshold has not been met.
Allotment of Unissued Shares After the CAC Circular
CAMA 2020 replaced authorised capital with issued capital. Companies that still carried unissued or unallotted shares from the old regime were given a transition period. Regulation 13 of the Companies Regulations 2021 first required those shares to be fully issued or cancelled by 30 June 2021. A Corporate Affairs Commission public notice of 16 April 2021, widely referred to as the CAC circular on allotment, extended that deadline to 31 December 2022.
The allotment of unissued shares had to be completed by that date. Options open to companies included:
- Allotting the shares to existing or new shareholders.
- Making a bonus issue, where reserves supported it.
- Cancelling the unissued capital and reducing share capital under the statutory reduction procedure.
Daily default penalties were prescribed at ₦250 for a small company, ₦500 for a private company that is not a small company, and ₦1,000 for a public company, payable by the company and every officer in default. Share capital that remained unissued after 31 December 2022 is not recognised as part of the company’s share capital until it is fully issued or the capital is reduced. Companies that still show unallotted shares on the Nigerian corporate registry should treat regularisation as outstanding compliance, not as optional housekeeping. New issues after CAMA are different: shares are issued and allotted together, so a fresh pool of unissued capital should not be created.
Procedure for Allotment of Shares in a Private Company
Share allotment is the company’s act of appropriating a stated number of shares to a named person. It is distinct from a transfer, which moves shares already held by an existing member. The procedure for allotment of shares in a private company follows the Companies and Allied Matters Act, the company’s articles, and the filing rules of the Corporate Affairs Commission.
Who May Allot Shares
Section 149 vests the power to allot shares in the company. In a private company, that power may be delegated to the directors by the articles or by a resolution of the company. A public company may delegate only within the limits set by CAMA and the Investments and Securities Act, usually with a cap on number, purpose, and time. Allotting shares beyond the issued capital is not permitted. If more shares are required, the company must first increase issued share capital and allot the new shares as part of that increase.
Existing shareholders generally have pre-emptive rights over new equity shares, in proportion to their holdings, unless those rights are excluded by the articles or waived by special resolution. The offer period is 21 days. Only shares not taken up may then be offered to outsiders. A private company that intends to bring in a new investor should document any waiver clearly.
Steps for Allotting Shares
A practical sequence for allotting shares is as follows.
- Confirm that the articles allow the proposed issue, identify the class of shares, and decide whether pre-emptive rights will be observed or waived.
- Pass the appropriate board or general-meeting resolution. An increase in issued share capital must be approved in general meeting. A written resolution may be used where the articles and CAMA allow it.
- Obtain a written application from each person who will take shares, stating the number required. The applicant may withdraw in writing before allotment.
- Accept the application in whole or in part and notify the applicant of the allotment and the number of shares within 42 days. Acceptance creates a contract to take the shares.
- Collect the subscription price, in cash or in non-cash consideration that has been properly documented and stamped. Confirm that the 25 percent paid-up condition is met where the allotment forms part of an increase.
- Enter the allottee in the register of members. Membership arises when the person has agreed to become a member and the name is entered. Issue a share certificate within the statutory period, generally two months of allotment unless the terms of issue provide otherwise.
- Update the register of persons with significant control if the new holding crosses a relevant control threshold, and file that change with the Corporate Affairs Commission.
- File the return of allotment and, where capital has increased, the notice of increase, and pay the applicable fees and stamp duty.
Return of Allotment and the Share Capital and Allotment Statement
Section 154 requires a company limited by shares to deliver a return of allotment to the Commission within one month of the allotment. The return states the number and nominal value of the shares, the names, addresses, and description of the allottees, and the amount paid or payable on each share, including any premium. Shares allotted for consideration other than cash require the supporting contract and the prescribed particulars of that consideration.
In practice this filing is the share capital and allotment statement submitted on the prescribed form, currently processed as CAC 5 (return of allotment of shares), which also covers notice of an increase in issued share capital. Supporting documents typically include the signed resolution, identification of individual allottees, constitutional documents of corporate allottees, and evidence of stamping. Where the Commission asks for further particulars, it must allow at least seven additional days, and that time extends the one-month period.
Failure to file does not, by itself, undo a valid allotment once the member has been entered on the register. It does expose the company and its officers to daily penalties, and it leaves the public record at the Nigerian corporate registry incomplete. Late filing can be regularised, and the court may extend time where the omission was accidental or it is just and equitable to do so. We recommend filing within the month rather than relying on relief after the event.
Where the allotment is also an increase in issued share capital, section 127 adds a shorter notice period. The company must give the Commission notice of the increase within 15 days of the resolution. The notice includes the classes of shares, the conditions of issue, and a copy of the resolution, and it is the point at which stamp duty and filing fees on the increase are paid. If another regulator must approve the increase, the company notifies the Commission of that fact within 15 days, with a director’s affidavit. The 15-day period is then extended to a date no later than 10 days after that approval. If approval is still outstanding, a fresh notice and affidavit are required every 48 days. If approval is not obtained within nine months of the first notice, the resolution increasing capital becomes void.
Increasing Share Capital on the CAC Portal
Post-incorporation share capital changes are filed through the Corporate Affairs Commission online portal, usually by an accredited agent. The current workflow treats increasing share capital and allotting shares as one process, which matches the rule that allotment is made at the same time the shares are issued.
The usual portal path is:
- Search for the company and open its dashboard.
- Select the post-incorporation service for an increase in issued share capital.
- Enter the date of the resolution and the new share details, including class and nominal value.
- Allot every new share to a named shareholder before submission. Partial allotment that leaves shares unallotted is inconsistent with the issued-capital model.
- Upload the resolution, updated memorandum and articles where required, identification documents, and evidence of stamp duty.
- Pay the Commission’s filing fees and submit. Processing timelines published by the Commission for CAC 5 filings are measured in working hours once a complete application is accepted, but queries restart the clock.
Fees scale with the amount of the increase and should be confirmed on the portal before payment, because schedules change. Professional costs, stamp duty, and any Financial Reporting Council dues are separate from the Commission’s fee. After approval, obtain a certified copy of the filed return and update the company’s statutory registers so they match the public record.
A company cannot use a share-transfer filing to achieve an issue of new shares, and it cannot use an allotment filing to move shares from one existing member to another. Transfer and transmission have their own forms, instruments, and stamp-duty treatment.
Filing of Annual Returns and Share Capital Records
Filing of annual returns is a separate obligation, but it is closely tied to share capital compliance. An annual return tells the Nigerian corporate registry that the company is still active and sets out its members, directors, registered office, and capital position as at the return date. Share allotment that has not been filed will often surface as an inconsistency when annual returns are reviewed.
Under section 421 of the Companies and Allied Matters Act, a company must complete and deliver its annual return not later than 42 days after the annual general meeting for the year. A newly incorporated company is not required to file in the year of incorporation; the first return falls due after the statutory grace period, generally within 18 months of incorporation, and thereafter by reference to the annual general meeting. Business names file on a different calendar, not later than 30 June each year except in the year of registration. Small companies and single-shareholder companies may have modified meeting rules, but the return obligation itself does not disappear.
Annual returns filing is done on the Commission’s portal. Late filing attracts penalties that accumulate with each year in arrears, and persistent default can lead to the company being marked inactive or, in serious cases, struck off. Banks, investors, and regulators routinely treat outstanding annual returns as a due-diligence failure. A company that has just completed an increase in share capital or an allotment of unissued shares should file the capital change first, then file annual returns that reflect the updated register. Filing returns that still show the old capital creates a mismatch the Commission may query.
Practical Compliance Points
A few points prevent most rejections.
- Do not allot more shares than the issued capital. Increase and allot together when new money or new investors are coming in.
- Name every allottee, state the class and number, and keep the percentages reconcilable to 100 percent of issued shares.
- Observe or expressly waive pre-emptive rights before offering shares to a new investor.
- File the notice of increase within 15 days and the return of allotment within one month, and do not assume portal acknowledgement replaces stamping.
- Update the register of members, issue share certificates, and file any persons-with-significant-control change.
- Keep annual returns current. An inactive status blocks or delays later share filings.
- For foreign participation, confirm that issued capital meets the ₦100 million share capital threshold before relying on post-incorporation approvals or expatriate-quota applications.
This guide is general information on the Corporate Affairs Commission process and the Companies and Allied Matters Act. Specific transactions, especially those involving foreign investors, regulated sectors, or non-cash consideration, should be checked against the current portal requirements and the company’s articles before documents are signed.
Frequently Asked Questions
What is the minimum share capital for a private company in Nigeria?
Under the Companies and Allied Matters Act, a private company needs a minimum issued share capital of ₦100,000, and a public company needs ₦2,000,000. Regulated sectors set higher floors. A company with foreign participation is expected to meet a ₦100 million share capital threshold before the Corporate Affairs Commission will treat the registration and later filings as compliant with the expatriate-quota capital rule.
How soon must a return of allotment be filed?
Section 154 requires the return of allotment to be delivered to the Corporate Affairs Commission within one month of allotment. If the allotment also increases issued share capital, section 127 requires notice of that increase within 15 days of the resolution. Both filings, together with stamp duty, are handled as post-incorporation share capital work on the Commission’s portal.
What happened to unallotted shares after the CAC circular?
The CAC circular on allotment extended the deadline for existing companies to issue or cancel unissued shares to 31 December 2022. Shares still unallotted after that date are not recognised as part of share capital until they are issued or the capital is reduced, and the company and its officers remain exposed to daily default penalties. New issues under CAMA are allotted at the same time they are issued, so companies should not recreate a pool of unallotted shares.