How many shares does a company need?
The number of shares you create is nominal (you can make it up), the only legal requirement is there is at least 1 share valued at 1 cent.
Typically people do 100 shares at $1 each, for a total share value of $100, but can be any amount! We suggest keeping it easy and simple to divide if there are multiple shareholders.
Please note that the total share capital will typically need to be input when creating a company bank account. It is your money, though most banks require that amount to stay in the account as share capital, but check with your bank T&Cs.
What are shares?
In simple terms, shares are often how you buy into the company, and are how responsible (liable) you are for the company. The number of shares will also determine how much you will benefit if the company is sold.
These show the $ value of the company and are 'created' when paid for when opening the company bank account.
Can the number of shares change?
If you need to make changes to the Share structure once the company is registered, the Lawpath team can assist. A company change form will need to be submitted to ASIC, and the required documentation like Share Certificates and Members' Resolution will need to be passed.
Find out more about company changes here: Making Changes to a Company
Plan to have more than 1 shareholder in your company?
It's important to have a Shareholders' agreement to manage potential risks and disputes that may arise in the future.
The agreement will include the terms of each shareholder's control, what happens if a shareholder decides to leave and how their shares are paid for.
Start drafting your Shareholder's agreement from our legal template library here.