Shares may be allotted following the formalities set out in the articles of association. In general, shares may be allotted by a company for cash or non-cash consideration or a combination of both at par fully paid or partly paid or at par plus premium.
There is an unpaid share liability on shares that are not fully paid which the member is bound to satisfy when called on to do so by the company depending on the terms of issue. The company exercises a first lien on unpaid shares with the result that an unpaid call may result in the shares being forfeited or sold a third party.
The shareholders of the company will need to approve the allotment of new shares – typically the Board is authorized to make such allotment. Pre-emption rights (or rights of first refusal) prescribed by the articles of association will need to be complied with unless waived by the shareholders.
The allottee is entered in the company’s register of members as the holder of the new shares, with the allotment also being registered with the Cyprus Registrar of Companies.
