Board Resolution For Increase In Authorised Share Capital Template for Nigeria

A Board Resolution For Increase In Authorised Share Capital is a formal decision document that your company's board of directors must pass when expanding the maximum share capital your company can issue. Under Nigerian law, this resolution is mandatory before you can increase your authorised share capital and serves as the primary authorization document for the Corporate Affairs Commission (CAC) filing process.

When do you need this document?

You need this resolution whenever your company plans to raise additional capital beyond its current authorized limit. This typically occurs when you're preparing for new investment rounds, planning major business expansion, or when potential investors require increased share capital capacity. Banks and financial institutions often require this document when considering large loans or credit facilities. Additionally, if you're preparing for a public offering or bringing in strategic partners, the increased authorized share capital provides flexibility for future equity transactions. The resolution is also necessary when your company's growth trajectory requires additional working capital or when you're restructuring ownership to accommodate new shareholders.

Key legal considerations

Your board resolution must comply with strict legal requirements under CAMA 2020. The resolution must clearly state your company's current authorized share capital, the proposed increase amount, and the new total authorized capital. You need to ensure proper board meeting procedures are followed, including adequate notice to all directors and achieving the required quorum. The resolution should specify the types and classes of shares being increased and any voting rights attached to new shares. Important clauses must address how the increased capital will be utilized and whether existing shareholders have pre-emptive rights. You should also consider the impact on existing shareholding ratios and ensure compliance with any restrictions in your company's articles of association.

Legal requirements in Nigeria

Under the Companies and Allied Matters Act (CAMA) 2020, specifically sections 124-131, your company must follow prescribed procedures for share capital increases. The board resolution must be passed before seeking shareholder approval, as increases in authorized share capital typically require special resolution by shareholders holding at least 75% of voting rights. You must file the resolution with the Corporate Affairs Commission (CAC) along with Form CAC 2.1 and pay the prescribed fees within specified timeframes. The CAC requires certified copies of both the board resolution and shareholders' resolution, plus an updated memorandum of association reflecting the new share capital. Your company must also ensure compliance with Nigerian Investment Promotion Commission Act requirements if foreign investors are involved. Additionally, you may need to engage auditors to verify the financial capacity to support the increased capital structure, and all filings must be completed before the new shares can be legally issued.