Increasing a company’s share capital may be necessary when you are bringing in new investors, expanding operations, converting debt into equity, capitalising reserves, or meeting the minimum capital requirement of a regulator. However, the process is not simply a matter of changing a figure on the Corporate Affairs Commission (CAC) portal.

Under the Companies and Allied Matters Act 2020 (CAMA 2020), the old concept of “authorised share capital” has been replaced by issued share capital. There is no longer an authorised capital ceiling that must be increased before a company can issue more shares. Instead, a company generally increases its capital by properly approving and issuing new shares, paying applicable stamp duty, and completing the required statutory filings.

This guide explains how to increase share capital in Nigeria in 2026 and highlights the compliance issues you should consider.

What Does Share Capital Mean Under CAMA 2020?

Share capital is the nominal value of the shares issued by a company to its members. It represents the equity structure of the company and determines, among other things, the ownership interests and voting rights of shareholders.

Under the previous legal framework, companies commonly referred to an authorised share capital. The maximum amount of shares the company could issue. CAMA 2020, together with the Companies Regulations 2021, changed this structure by focusing on issued share capital instead.

This distinction is important because two different transactions are often confused:

• Issuing new shares: This increases the company’s issued share capital and may change the ownership percentages of existing shareholders.
• Reclassifying, consolidating or subdividing existing shares: This changes the form or classification of existing shares but does not necessarily increase the company’s share capital.

The CAC’s Operations Checklists recognise an increase in issued share capital and a return of allotment as post-incorporation compliance matters.

Why Might a Nigerian Company Increase Its Share Capital?

A company may decide to increase its share capital for several commercial or regulatory reasons, including:

• Raising funds from new or existing investors.
• Funding business expansion, acquisitions or new projects.
• Converting shareholder loans or other debt into equity.
• Capitalising retained earnings or reserves.
• Meeting a regulator’s minimum capital requirement.
• Supporting an application for a licence or approval.
• Restructuring ownership before a merger, investment or group reorganisation.
• Demonstrating a stronger capital base to banks, contractors or commercial partners.

These transactions may also require careful legal drafting of corporate documents to support implementation.

If you are still establishing your company, you may also wish to review the requirements for LTD and PLC company incorporation before determining the appropriate initial capital structure.

How to Increase Share Capital in Nigeria: Step-by-Step Process

1. Review the constitutional and investment documents

Begin by reviewing the company’s Articles of Association, shareholders’ agreement and any investment documents. Check:

• The existing share classes and rights attached to them.
• Restrictions on issuing new shares.
• Pre-emption or first-refusal rights.
• Investor consent requirements.
• Provisions on preferred, ordinary or redeemable shares.
• Whether the proposed issue requires amendments to the Articles.

The proposed increase must fit within the company’s existing constitutional structure or be accompanied by the necessary amendment.

2. Pass a board resolution

The directors should meet and approve a resolution recommending the increase. The resolution should address:

• The number and class of new shares.
• The proposed issue price and nominal value.
• Whether the shares will be issued for cash, capitalisation of reserves or conversion of debt.
• The proposed allottees.
• The basis of allotment.
• The date and venue of the general meeting..

3. Obtain shareholder approval

Shareholders must approve the proposed increase and allotment at a general meeting or, where legally permitted, by written resolution.

The required approval may be a special resolution or another level of approval specified by CAMA 2020 or the Articles. If new shares create a different class or affect existing class rights, separate class consent may also be required.

Do not assume that a board resolution alone is sufficient.

4. Consider pre-emption rights

Existing shareholders commonly have a right to subscribe for new shares in proportion to their existing holdings. This protects them from unfair dilution.

If the company wishes to issue shares to a new investor instead, existing shareholders may need to waive or formally disapply their pre-emption rights. Any waiver should be clearly documented in writing.

5. Obtain regulatory approval where applicable

Banks, insurance companies, capital market operators, pension businesses and other regulated entities may require prior approval from their primary regulator.

Obtain the approval before filing with the CAC where required. Failure to secure it may delay registration or cause the filing to be rejected.

6. File the notice of increase with the CAC

The company must file the relevant resolution, stamp notice and supporting evidence with the Corporate Affairs Commission (CAC).

The filing should generally be made within 15 days of the resolution approving the increase. The traditional component filing is commonly referred to as the notice of increase in share capital, often associated with Form CAC 2.2.

The CAC portal and forms may be updated from time to time. The current CAC checklist also refers to a consolidated Form CAC 5 process for notice of increase and return of allotment.

7. File the Return of Allotment

Where new shares have actually been allotted, the company must also file a return of allotment in Nigeria. This is distinct from simply approving an increase.

The Return of Allotment, commonly referred to as Form CAC 2.3 in many company secretarial workflows, records details such as:

• The names and particulars of allottees.
• The number and class of shares allotted.
• The amount paid or payable.
• Any premium.
• Whether the consideration was cash or non-cash.

The return should generally be filed within 15 days of the allotment date. You can review the CAC’s guidance on the Return of Allotment of shares.

8. Update statutory registers and issue certificates

After the allotment, update the company’s:

• Register of Members.
• Register of Allotments.
• Register of Charges, where relevant.
• Share certificates.
• Capital and accounting records.

The company should ensure that its internal records correspond exactly with the information filed at the CAC.

9. Update beneficial ownership and control information

If the allotment changes control percentages, voting rights or significant ownership, review the company’s Persons with Significant Control information.

A new investor may become a reportable person, or an existing shareholder may cease to meet the relevant threshold. Director and shareholder information should also be reviewed where the transaction affects control or governance.

10. Update tax, accounting and corporate records

The increase may affect the company’s financial statements, share premium account, shareholder loan records and tax analysis. Where shares are issued for non-cash consideration or debt conversion, valuation and accounting evidence may be required.

Obtain professional advice before treating reserves or debt as equity.

Mistakes to Avoid

Avoid the following common errors:

• Filing only the notice of increase and not the Return of Allotment.
• Missing either 15-day filing window.
• Allotting shares without proper shareholder authority.
• Ignoring pre-emption rights.
• Failing to obtain primary regulator approval.
• Using outdated forms without checking the current CAC portal.
• Failing to update statutory registers and share certificates.
• Omitting changes to Persons with Significant Control information.
• Filing documents with inconsistent names, dates or share figures.

Non-compliance can result in CAC penalties and late filing charges. It may also lead to rejection, questions about the validity of the allotment, director liability, complications during future share transfers and difficulties obtaining a clean company search. The risk of enforcement is particularly notable during an active CAC compliance drive.

Conclusion

Increasing issued share capital involves corporate approvals, shareholder rights, stamp duty, CAC filings and accurate statutory recordkeeping. A procedural error can thwart an investment transaction or create complications for future financing and due diligence.

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