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Companies

Company share issues

Key points:

  • A share issue is when a company creates and allocates shares.
  • Details of all shares that have been issued must be kept on the company’s share register.
  • Companies can issue different types and classes of shares.
  • Companies must tell ASIC about a share issue within 28 days after the issue.

About share issues

When a company creates and allocates shares it’s called a share issue. The company can decide the rules for its shares. For example, how much they cost, what benefits come with them and any limits on those benefits. A share issue changes the share structure.

Companies must keep a record of all the shares they have issued on their share register.

Companies must tell ASIC about share issues

The company must tell us about every share issue within 28 days after the issue. The company must tell us the:

  • date the shares were issued
  • how many shares were issued
  • the class (or classes) that each share belongs to
  • amount (if any) that was paid, or agreed to be paid, on each of the shares
  • amount unpaid (if any) on each of the shares.

Proprietary companies must also tell us:

  • details of the members who received shares
  • the shareholding of each member.

See ‘How to tell ASIC about share issues’ below.

Changes to share structure or classes

Companies must tell us about any changes that affect the share structure or share classes. You must tell us about new classes of shares within 28 days after their issue.

Types of shares

A company can issue different classes of shares. Each class of share has its own rules and benefits that make it different from other classes.

Companies often use common names for these, such as ‘ordinary shares’, ‘A class shares’ or ‘B class shares’. They can also choose their own title for each class of share.

The title of each class has a corresponding code.

Examples of share classes and codes

Share class code Full title
A A
B B... etc
EMP Employee’s
FOU Founder’s
LG Life governor’s
MAN Management
ORD Ordinary
RED Redeemable
SPE Special
PRF Preference
CUMP Cumulative preference
NCP Non-cumulative preference
REDP Redeemable preference
NRP Non-redeemable preference
CRP Cumulative redeemable preference
NCRP Non-cumulative redeemable preference
PARP Participative preference

A company can also issue other types of shares.

Bonus shares

Bonus shares are extra shares a company issues to existing members at no extra cost. These shares are usually issued in proportion to a member’s existing share ownership. They may be issued instead of paying a dividend.

Preference shares

Preference shares usually give members priority over other classes of shareholders to payments of dividends or repayment of capital or both. There are different kinds of preference shares that give different rights to members (see examples in the table above).

The rights attached to an issue of preference shares must be approved by a special resolution or be set out in the company’s constitution. This protects the interests of existing members by ensuring that they agree to the rights of the preference shares.

Redeemable preference shares

Redeemable preference shares are issued with the condition that the company can redeem or buy back the share later, based on certain terms. Redeemable preference shares can be redeemed at:

  • the company’s option
  • the members’ option
  • a fixed time or on a specified event.

How to tell ASIC about share issues

Tell us about share issues using the changes to company details transaction on the company officeholder portal.

You must summarise your share structure by completing the share structure table within the transaction. At the same time, you must also tell us about any changes that affect the share structure.

The section or sections you need to fill in depends on the type of company and when you are notifying us.

Sections of the changes to company details transaction that companies need to complete

Company type and timing Issue of shares (Section C2) Change of share structure table (Section C3) Change to register of members (Section C4)

Proprietary company when the shares are issued

Fill in this section

Fill in this section

Fill in this section

Public company when the shares are issued

Fill in this section

Not required

Not required

Public company as part of the annual review

Fill in this section

Fill in this section

Not required

For issuing some types of shares, the company must also lodge a form. See the tables below for instructions.

Guide on how to notify us of share issues for different share types

Guide for all companies

Type of change What to lodge When to lodge

New issue (s254X(1))

A new class of shares is issued

Change to company details transaction on the company officeholder portal.

Within 28 days after the issue

New issue – current class (s254X(1))

New shares are issued within a current class (e.g. 500 ‘A class’ shares become 600 ‘A class’ shares)

Change to company details transaction on the company officeholder portal.

Within 28 days after the issue

Division of a class (s246F(1)(a))

Shares that were previously undivided are divided into different classes (for example, 200 ‘A class’ shares are divided into 100 ‘B class’ and 100 ‘C class’ shares)

Notification of division or conversion of classes of shares (Form 211)

Within 14 days after the division

Conversion of a class (s246F(1)(b))

Shares are converted into another class (for example, 500 ‘A class’ shares become 500 ‘B class’ shares)

Notification of division or conversion of classes of shares (Form 211)

Within 14 days after the conversion

Conversion of shares within the same class to a larger or smaller number (s254H)

When any company passes a resolution to convert all or any of its shares into a smaller or larger number of shares (for example. 100 shares are converted to 1000 shares)

 Notification of resolutions regarding shares (Form 2205)

Within 1 month after passing the resolution

Guide for proprietary companies only

Type of change What to lodge When to lodge

Non-cash issue by a proprietary company
(s254X(1) & (2))

A proprietary company issues shares for a non-cash benefit

Change to company details transaction on the company officeholder portal.

AND

If the shares are issued under a written contract:

Certification of compliance with stamp duty law (Form 207Z)

Within 28 days after the issue

Guide for public companies only

Type of change What to lodge When to lodge

Non-cash issue by a public company
(s254X(1) & (2))

A public company issues share for non-cash benefit

Change to company details transaction on the company officeholder portal.
AND
If the shares are issued under a written contract:

  • Certification of compliance with stamp duty law (Form 207Z) AND
  • Notification of details of shares issued other than for cash (Form 208) OR
Copy of the written contract (if any)

Within 28 days after the issue

Using a currency other than Australian dollars for companies register information

Your entity may use a currency other than Australian dollars when it lodges information with us about its shares. Note that our register does not indicate a particular currency, so people looking at the information may assume that amounts shown on the register are in Australian dollars.