Your authorised share capital is set out in the Memorandum of Incorporation, so changing it means amending the MOI — which requires a special resolution of shareholders and a filing at CIPC. Issuing shares from the existing authorised pool is a different and much simpler thing, requiring only a board resolution in most cases. The distinction matters because one takes days and the other takes weeks.
The moment people discover this is usually the moment an investor is waiting to subscribe and there are no authorised shares left to issue.
Which change are you actually making?
Three different things get called "changing the share capital", and they have completely different processes.
| What you want | What it involves | Difficulty |
|---|---|---|
| Issue shares from the existing authorised pool | Board resolution, register update, certificate, beneficial ownership filing | Straightforward |
| Increase the authorised shares | Special resolution + MOI amendment + CIPC filing | Weeks |
| Create a new class of shares | Special resolution + MOI amendment + CIPC filing | Weeks |
Establish which one you need before promising anything to anybody.
Authorised versus issued, again
Because this is the source of nearly all the confusion.
Authorised is the ceiling set in your MOI — the maximum the company may issue. Unissued authorised shares belong to nobody and carry no rights.
Issued is what shareholders actually hold. Only these count for control and for dividends.
A company with 1,000 authorised and 100 issued has 900 available. A shareholder holding all 100 issued owns 100% of the company.
Running out of authorised shares is the constraint that bites, because a company cannot issue what its MOI does not authorise. See different classes of shares and why they matter.
Issuing from the existing pool
The simple case, and the one most small companies need.
1. Check the MOI and any shareholders' agreement. Pre-emptive rights, whether board approval is enough, whether existing shareholders must be offered first. This step is skipped constantly and it is what makes an issue challengeable.
2. Confirm there are enough unissued authorised shares of the right class.
3. Pass a board resolution authorising the issue — the number, the class, the person, the consideration. Where the MOI or the Act requires shareholder approval, obtain that too.
4. Receive the consideration and record it.
5. Update the securities register.
6. Issue the share certificate.
7. File beneficial ownership where the change affects it, within the required period — generally 10 business days.
See how to issue shares to a new shareholder and do you need share certificates.
Increasing the authorised share capital
The slower route, because it changes the company's constitution.
1. Establish what your MOI currently authorises — number and classes. Read it rather than assuming.
2. Decide the new figure, with room to spare. Increasing to exactly what this transaction needs means doing this again next time. Authorised shares cost nothing to have unissued.
3. Prepare the special resolution. An MOI amendment generally requires a special resolution of shareholders.
4. Hold the meeting or circulate a written resolution, with proper notice where a meeting is required.
5. File the amendment at CIPC in the prescribed form, with the resolution and the amended MOI provisions.
6. Wait for it to be registered. Nothing may be issued from the increased capital until the amendment is effective.
7. Then issue, following the ordinary process above.
Confirm the current CIPC forms and process before filing. CIPC's forms and requirements are updated from time to time, and a rejected filing restarts your timeline. See why CIPC rejects filings and how to fix them.
What about reducing share capital?
Materially harder, and this is where advice is not optional.
A reduction generally involves a distribution to shareholders, which brings the solvency and liquidity test into play — the company must be able to pay its debts as they fall due for a period after the distribution, and its assets must exceed its liabilities.
Directors who authorise a distribution without properly applying that test expose themselves personally. See a director's duties under the Companies Act and can a director be held personally liable.
A share buyback is the mechanism most small companies actually want when they think about reducing capital — the company buys shares from a shareholder rather than reducing capital across the board. It has its own requirements, including a special resolution where the repurchase is from a director or prescribed officer. See what is a share buyback.
Both routes have tax consequences — dividends tax, capital gains tax, or both depending on the structure. Model them before deciding.
Timing, and why it matters
This is the practical reason to read this article before you need it.
| Step | Realistic timing |
|---|---|
| Board resolution to issue from the existing pool | Same day |
| Special resolution for an MOI amendment | Days, plus notice period if a meeting is required |
| CIPC processing of the amendment | Weeks — and outside your control |
| Issue and register update once effective | Same day |
An investor expecting to subscribe next Friday, into a company with no authorised shares left, is not going to subscribe next Friday.
So check your authorised capital at the start of any transaction, not at closing. It takes two minutes and it is the cheapest thing on this page.
What gets missed
Not checking the MOI first. Pre-emptive rights and approval requirements live there, and ignoring them makes the issue challengeable by an existing shareholder.
Confusing authorised with issued — believing the company has shares available when it does not, or thinking a shareholder owns a percentage of the authorised rather than the issued.
Issuing before the MOI amendment is effective. The shares are not validly issued.
Forgetting beneficial ownership. A change in ownership requires a filing, generally within 10 business days. See how to file beneficial ownership.
Not updating the securities register. The certificate without the register entry evidences nothing.
Ignoring the tax. Issuing shares at below value, or to a connected person, can have consequences worth checking before rather than after.
Frequently asked questions
How do I increase my company's authorised share capital? By amending the Memorandum of Incorporation, which requires a special resolution of shareholders and a filing at CIPC. The increase is only effective once registered.
What is the difference between authorised and issued share capital? Authorised is the maximum the company may issue, set in the MOI. Issued is what shareholders actually hold. Only issued shares carry rights and count for control.
Do I need a special resolution to issue shares? Not usually, where you are issuing from the existing authorised pool — a board resolution generally suffices, subject to the MOI and the Act. A special resolution is needed to increase the authorised capital or create a new class.
How long does a CIPC MOI amendment take? Weeks, and the timing is outside your control. That is why authorised capital should be checked at the start of a transaction rather than at closing.
Can I issue shares before the MOI amendment is registered? No. Shares issued beyond what the MOI authorises, before the amendment is effective, are not validly issued.
How do I reduce my share capital? A reduction generally involves a distribution, which brings the solvency and liquidity test into play, and directors who authorise one without applying that test properly expose themselves. Most small companies actually want a share buyback instead. Take advice.
Do I have to tell CIPC when I issue shares? The issue itself is recorded in your own securities register rather than filed. But a change in beneficial ownership must be filed, generally within 10 business days.
How many authorised shares should I have? More than you currently need. Unissued authorised shares cost nothing to have, and increasing them later means a special resolution and a CIPC filing you may not have time for.
Check the authorised capital before you agree the deal
The two-minute version of this whole article: read your MOI, count what is authorised, subtract what is issued, and see whether the transaction fits. If it does not, you have weeks of work before you can complete — and knowing that at the start is very different from discovering it at closing.
Smartbook checks what your MOI actually authorises, handles the special resolution and CIPC amendment where more is needed, issues the shares and certificates, updates the securities register, and files the beneficial ownership that follows.
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Last reviewed: 28 August 2026. Written by the Smartbook team — SAIPA and SAICA accredited, SARS registered tax practitioners. CIPC forms and processes are updated from time to time. Share issues, reductions and buybacks have legal and tax consequences — take advice and have MOI amendments drafted by an attorney. General guidance, not legal advice.
Primary sources: CIPC · Companies Act 71 of 2008 · SARS