Good afternoon, please does registering a business as LTD mean the business owner has to have 1m in his or her account before they can register as LTD? Or it's the total amount of his/her goods ?
No. 1 million Issued share capital implies that's the value of the company as at the point of registration.
However, in principle, the business is expected to have its equivalent in assets for accounting purposes.
Shares capital refers to the amount of money invested in your company by its owners (shareholders). When registering your company with the Corporate Affairs Commission (CAC), you need to declare the total amount of shares capital.
Think of shares capital like the foundation of your company's financial structure. It represents the maximum amount of money your company can raise from its shareholders.
For example, if you declare ₦1 million shares capital, it means your company can issue shares worth up to ₦1 million to its shareholders. This amount can be increased later if needed.
The shares capital is important because it:
- Determines the company's ownership structure
- Affects the company's ability to raise funds
- Impacts the company's credibility and reputation
In Nigeria, the minimum shares capital requirement varies depending on the type of company and industry