Company Law: Share and Loan Capital Flashcards
True or false, a company cannot simply return share capital to its shareholders?
True
True or false, proceeds from share issues must be set aside and used to pay shareholders in the event of the company becoming insolvent?
False
True or false, dividends must only be paid from distributable profits available for the purpose?
True
True or false, share capital may be returned to the shareholders following an approved reduction of capital scheme?
True
True or false, what kind of resolution is required to approve a buy-back of company shares?
A special resolution for approving the payment of capital is required, with no special notice
How may an unlawful dividend be reclaimed?
Only by the company from members who knew them to be unlawful
What is a fixed charge?
A charge over specific company property which prevents the company from dealing freely with the property in the ordinary course of business
What is interest payments to debenture holders paid out of?
Pre-tax profit or loss for the period
S.128 TGCA 1992 provides a rule for working out the cost of a shareholding where there has been a reorganisation of share capital and a person pays for their new holding of shares. Which type of reorganisation does this provision apply to?
A rights issue of shares
What is a floating charge?
A charge over a class of company assets which enables the company to deal freely with the assets in the ordinary course of business
What are dividend payments paid out of?
Distributable profits, post-tax
True or false, the paid-up share capital of a company is s much of the nominal value of shares that has been paid by shareholders in respect of the company’s issue share capital only?
True
True or false, a company may not issue its shares for less than the nominal value?
True
True or false, a company can never have allotted share capital higher than issued share capital?
False
When a company reaches a certain predetermined target, what do convertible shares convert into?
Ordinary shares