A share represents a unit of the bundle of rights and liabilities which a shareholder has in a company as provided in the terms of issue and the Article and now includes the right to attend and vote at a meeting. See sections 114 and 650 CAMA. By section 116 the CAMA has abolished the issuance of non-voting or weighted shares except as provided in section 143 thereof.

Types of Shares: The main types are:
ü  Ordinary Share: By section 650 CAMA these are shares of the company attracting no special rights to the holders. They carry no fixed rate of interests or dividend. They bear the major financial risk of the company and are paid after the preference shareholders have been paid. In some cases they are referred to as the equity shares of the company.
ü  Founders or Deferred Shares: They are so referred because payment of dividends and return of capital to them comes after that of all the other classes of shares. They are often

v  Preference Shares: Where the Article or the Memorandum so provide, are entitled to priority over other shares in a company. They usually carry a right as to the pay of dividends of a fixed amount over ordinary shares. The dividend payable by a company to the holder of preference shares is fixed at a particular rate.
v   Redeemable Shares: By section 122 a public or a private company limited by shares shall where authorizes by the articles issue preference shares capable of being redeemed at the option of the company. It follows that unless the Articles specifically so authorize it, a company may not issue such shares.

Issue of Shares at a Premium
A share is issued at a premium where the value at which it is offered to the public is higher than its actual value as indicated in the memorandum of the company. Where this is the case, the amount in excess of the actual value of the shares is posted to a share premium account which is to be used for specified purposes only. For example, where the company intends to issue fully paid bonus shares to members, it could pay for the shares by drawing from the share premium account. Section 120 CAMA.

This refers to the ways and means by which a company offers its shares to the public. A public company desirous of inviting members of the public to subscribe to its shares may adopt any of the following methods:
Ø  Direct Offers to the Public: In this case the company makes a direct offer of the shares to the members of the public. This it does by publishing a prospectus, with an application form inviting the public to subscribe to its shares. Where the shares are not fully subscribed, the risk Is borne by the company, which may then enter into an underwriting contract with a finance house at a commission.
Ø   Offers for sale: In this case, the company will sell the shares to an issuing house. The issuing house will now issue a prospectus inviting members of the public to subscribe for the shares. The issuing house will often sell the shares at a higher price. By this means the company avoids the risk of the issue not being fully subscribed but turns that over to the issuing house, which may then arrange an underwriting of the issue.
Ø   Placing: This involves two methods: (A) The company sells the shares to an issuing house, which will in turn sell them to their clients at a higher price keeping the profit. (B) The Issuing House acts as the company’s agent to place the shares without subscribing for them. The Issuing House gets a commission called a brokerage. This is a cheaper and suitable method where the issue could be taken up by a few people.

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