lecture 3

Question 1

What are the ‘‘articles of association’’ of a company?

Answer 1

articles of association are the ‘constitution’ of a company and set out all the rules and internal workings of a company.

Question 2

What is the difference between ordinary and preference shares?

Answer 2

Ordinary shares are the most common type of shares, the shares represent the share in the company, and they recieve share of company’s profit as dividend. It gives shareholders right to vote.

Question 3

What are ‘pre-emption’ rights?

Answer 3

Pre-emption rights allow existing shareholders the first chance to buy new shares in proportion to their current ownership before the company can offer them to 3rd parties.