Issue of Share Premium

At IBCCS TAX we are experienced international tax planning advisers offering legal
& tax advisory assistance both on an international and local scale.

Issue of Share Premium

Share premium refers to the amount that members pay for a company’s shares over and above their nominal value. Therefore, when a company sells shares for more than the nominal value, it is issuing them at a premium.

Share premiums can be used as a means of raising capital for companies. By issuing shares at a premium, companies can raise additional funds that can be used to finance their operations, invest in new projects, or expand their business.

Planning, implementation, & compliance

Planning, implementation, & compliance

Frequently Asked Questions

  1. Board Meeting: Hold a Board of Directors meeting to pass a resolution for the issuance of new shares at a premium. The resolution must detail the number of shares to be issued, the nominal value of the shares, and the premium amount.
  2. Shareholders’ Approval: Depending on the Articles of Association of the company, it may be necessary to get the shareholders’ approval for issuing new shares at a premium. A special resolution (requiring at least 75% vote in favor) may be required in a General Meeting. Notice of such a meeting must be given to all members of the company.
  3. Amend the Articles of Association: If necessary, the Articles of Association should be amended to reflect the new share capital structure. This change must be approved by the shareholders and submitted to the Registrar of Companies.
  4. File with the Registrar of Companies: Once the resolution is passed and the Articles of Association are amended, the necessary forms must be filed with the Cyprus Registrar of Companies to record the change in the share capital structure of the company. This might include details of the new shares issued, the premium on them, and changes to the Articles of Association.
  5. Issue Share Certificates: Share certificates should be issued to the new shareholders, evidencing their ownership of the shares.

Update Share Register: Update the company’s share register to reflect the newly issued shares.

By a court application for reduction of share premium account.

Are You Looking For Tax Advice?

Reach out to us by clicking on the button here.

IBCCS Helping You Succeed In International Markets

Share capital and share premium funds must be kept separate under different entries on a company’s balance sheet.

However, the issuance of share premiums in Cyprus is subject to certain legal and regulatory requirements. For example, companies are required to comply with the provisions of the Companies Law and the Capital Markets Law, as well as the rules and guidelines issued by the Cyprus Securities and Exchange Commission (CySEC).

One of the key requirements for the issuance of share premiums in Cyprus is that it must be justified by the nature and scope of the company’s operations. In other words, companies must be able to demonstrate that the premium is necessary and proportionate to the value of the shares being issued. This is to ensure that companies do not use share premiums as a means of artificially inflating the value of their shares or misleading investors.

What people say about us

Management Team

Cezary Zieniuk

Managing Partner

Jowita Jablonska

Managing Partner

Anna Gavriilidi

Accounting Department Manager