company finance and insolvency Flashcards
O v P- dividends
o- not cumulative
p-cumulative
o v p -voting rights
o- yes
p- yes: normally restricted
o v p- general meetings
o-may attend and vote
p- normally restricted
pre-emption rights o v p
o- yes
p- no unless specified in articles or terms of issue
o v p liquidation
o- entitles to capital and share of surplus
p- rank above ordinary shares, entitled to repayment of capital only
when can a company alter the rights attaching to classes of shares?
- the articles must allow for variation
- agreements of >75% of that class of shareholder is usually required
can changes to classes of shares be objected to by minority interests?
YES objections must be lodged with the courts within 21 days of the vote by at least 15% of the class of members that voted against the alteration
when are shares allotted?
when they recieve letter of allotment or share certificate= evidence of title
how can new shares be allotted?
ordinary res- effective for up to 5 years after
power form the artices
rules which allotments are subject to…
where shares are issued wholly for cash- pre-emption rights are granted
- must offer to existing company share holders pro rata to existing holding,
shareholders must be notified in writing
offer must be open for at least 21 days
private comapny may disclude.disapply pre-emption rights by spcecial res
private companies may accept payment for shares in the form of…
- goods
- money
- services
public companies may only issue shares in exchange for…
- money= at least 1/4 of the nominal value plus the whole of any premium payable
- goods=must be independently value 6 months before allotment and received within 5 years of allotment
a company cannot distribute part of its share premium account….
- as dividend
- to write off expenses incurred in connection with the formation of the company
- to write off expenses incured in connection with an issue of debentures
shares are transferable in accordance with…
the arts
can a company refuse to register shares?
yes but must provide notice within 2 months. they still entitles to dividend and return on capital on winding up but not able to exercise all members rights
how long quick are shares transferred under crest?
3 days
companies on AIM or Official List…
have to publish their share capital in any month which a change has occurred
when must a shareholder fill in a notification form?
if shareholding becomes 3% and every 1% thereafter
must do within 2 trading days
reducing share capital: any limited company
- special res
- confirmation by court
- creditors entitles to object
- plc may have to register as ltd if falls below minimum 50k
reducing share cap: private company
-speical res
-solvency statement-within 15 days of res
-one member with non redeemable shares must remain
opy of res, statement of cap and solvency statement or court order must be files with registrar
when can a company purchase its own shares?
- redemption or purchase in accordance with CA
- acquisition of shares in a permitted reduction of capital
- purchase of shares in complying with a court order
- forfeiture or surrender of shares in accodance with companies act
when my a private company purchase shares out of capital?
- the directors produce a statutory declaration of solvency
- the declaration is audtied
- a special res is passed
- the company advertises the res
- creditors are given an opportunity to object
private company dividend formula:
accum realised prof less accum realised losses
public company dividend formula
accum realised prof less accum realised loss less accum unrealised losses
