Although private companies cannot utilise the ASX as a platform to buy/sell shares, in accordance with the Corporations Act 2001 , a company can issue shares via the three methods below.
Upon Registration - A person can become a shareholder and have shares allotted to them upon the registration of the company if they are specified on the registration form.
Issuing Shares - A company can create new shares and grant to proposed shareholders. The shareholders will receive a share certificate, a document acting as legal proof of the ownership of shares, once the transaction is complete.
Transferring Shares - Shares can be transferred when existing shares are granted to a proposed shareholder. The transfer of shares entails several legal requirements, mainly concerning compliance with ASIC under the Corporations Act, Company Constitutions and Shareholder Agreements, where existing shareholders may be entitled to a priority purchase of the proposed shares or a right of refusal. A private company is limited to having 50 non-employee shareholders, however this is not limited to 50 shares (i.e. a company may have thousands of shares but these can only be controlled by 50 individuals).