Chapter 4

Question 1

A shareholder generally enjoys the right to:

Answer 1

– vote
– information
– share in the profits of a company that have been distributed by the
company
– share in the net surplus capital of a company on its winding-up

Question 2

Two types of share capital

Answer 2

– authorised share capital
– issued share capital.

Question 3

The capital maintenance concept

Answer 3

Held that companies must
maintain their issued share capital as it is a guarantee fund
intended for the payment of creditors

Question 4

What happens if a company fails the solvency and liquidity test?

Answer 4

It will also not be able to declare a dividend