Increase and reduction of capital is governed by specific rules laid down by the ohada uniform act as regards public limited companies. The modalities under which the capital of a public limited company is increased is quite different from a reduction in the capital of a public limited company.
The share capital of a public limited company may be increased either by issuing additional shares or by increasing the nominal value of existing shares. The new shares are paid up either in cash, by in-kind contributions, by set-off against debts of the company that are certain, liquidated and due, or by capitalization of reserves, profits or share premiums. New shares may be issued for their nominal value or for their nominal value plus a share premium.
The existing share capital of the company must be fully paid up before the issuance of new shares to be paid for in cash. Non-compliance with this requirement will lead to the nullity of the operation and make the management liable to the application of criminal penalties in accordance with the national criminal law of the member state concerned.
Reduction of share capital may be reduced either by reducing the number of shares or by reducing the nominal value of the existing shares. The reduction of capital may be authorized or decided by the extra-ordinary general meeting, which may delegate all the necessary powers to the board of directors or the managing director, as the case may be, to effect the reduction. The reduction may not affect the equality among the shareholders, unless the shareholders who would be adversely affected expressly agree.