What determines the amount of capital a company can issue as share capital?

The amount of capital a company can issue as share capital is primarily determined by the statutory limit set by law. This statutory framework establishes the maximum share capital that a company can issue, which varies depending on the jurisdiction and the type of company.

Different laws may specify minimum share capital requirements for certain types of companies, ensuring that businesses have enough capital to operate and meet liability obligations. This legal framework helps protect stakeholders by ensuring that companies are adequately funded and can fulfill their obligations.

While the company's articles of association and the shareholders' agreement can describe how shares are issued and managed, they must align with the statutory limits imposed by law. Similarly, decisions made at the board level concerning share issuance must also conform to the limits set by legislation. Therefore, the statutory limits provide the foundational legal parameters within which all other governing documents and internal decisions must operate.