ICANBusiness LawCompany Law under CAMA 2020: Incorporation2025

Promoters of Vanguard Tech Ltd intend to incorporate a private company under CAMA 2020 with a proposed share capital structure of ₦500,000 divided into 500,000 ordinary shares of ₦1.00 each. At incorporation, Promoter A subscribes for 250,000 shares, Promoter B subscribes for 100,000 shares, and Promoter C subscribes for 50,000 shares, leaving 100,000 shares unsubscribed. How must the company address this situation to comply with CAMA 2020?

AThe CAC will hold the 100,000 unsubscribed shares in trust until a new shareholder subscribes
BThe total issued share capital must be set at ₦400,000 so that 100% of the share capital is fully taken up by subscribersCORRECT
CThe 100,000 shares can be retained as unissued authorized share capital for up to two years post-incorporation
DThe company must automatically register as a public limited company to issue the remaining 100,000 shares
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Why the answer is B, and why the others tempt you.
Under CAMA 2020, unissued authorized share capital was eliminated; all shares in existence must be fully issued upon incorporation. Therefore, Vanguard Tech Ltd cannot leave 100,000 shares unissued; its issued share capital must equal total subscriptions (₦400,000), which still satisfies the ₦100,000 minimum issued share capital requirement for private companies.
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