Issuing new shares can bring funding into a company and change existing owners' percentages. It should start with a clear ownership calculation and the required approvals, not an informal promise that an investor will receive a certain percentage.
Model the result before agreeing terms List the existing shares, proposed new shares and rights attached to each class. Calculate the ownership after the issue. Be precise about whether a promised percentage is measured before or after another planned investment.
For example, issuing shares to a new investor can reduce existing shareholders' percentages even when none of them sells a share. Make that effect explicit before signing.
Check authority and documentation Review the articles, shareholder agreement and applicable approval requirements. Document subscription terms, payment and any conditions. The company secretary can help identify the relevant return of allotment, generally form NSC1, and filing instructions for the transaction.
Do not confuse a draft term sheet with a completed allotment. The effective legal steps and dates should match the records and accounting treatment.
Update the corporate and provider file Maintain the register of members and share certificate records and review the significant controller position. If new funds arrive, retain evidence of their legitimate source and purpose. Banks may ask why an unusual amount has entered the account and whether ownership has changed.
Finish with a reconciled file showing the approved transaction, payment evidence, updated ownership and submission receipts. The legal, accounting and provider records should describe the same investment rather than three different versions of what the founders intended.
Sources and scope
General information, not advice for your individual legal or tax position. Confirm current requirements with the relevant authority or provider.