What is the issue of shares?

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Multiple Choice

What is the issue of shares?

Issue of shares means the process by which new shares are created and allocated to those who subscribe for them, culminating in the owners’ names being entered in the share register. Shares are not considered issued until both allotment to the subscriber and registration of their ownership are complete. This is why existing shareholders usually have pre-emption rights when new shares are issued—they’re given the first opportunity to maintain their proportionate stake, unless those rights are disapplied. This concept is distinct from listing on a stock exchange (which is about trading shares), buying back shares (which reduces issued capital), or paying dividends (a distribution of profits).

Issue of shares means the process by which new shares are created and allocated to those who subscribe for them, culminating in the owners’ names being entered in the share register. Shares are not considered issued until both allotment to the subscriber and registration of their ownership are complete. This is why existing shareholders usually have pre-emption rights when new shares are issued—they’re given the first opportunity to maintain their proportionate stake, unless those rights are disapplied. This concept is distinct from listing on a stock exchange (which is about trading shares), buying back shares (which reduces issued capital), or paying dividends (a distribution of profits).

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