Ordinary Share Capital

Question 1

Issue of Bonus Shares

Answer 1

Cash is retained in the company.
Can be made out of the general reserve.

Question 2

Reserve

Answer 2

Any equity item other than share capital.

Question 3

Dividend

Answer 3

A distribution of the profits of a company to the shareholders.
Two types: interim and final.

Question 4

Interim dividend

Answer 4

Declared and paid by the directors without shareholder approval. Authority to pay an interim dividend must be given to the directors in the constitution of the company.

Question 5

Final dividend

Answer 5

Recommended by the directors, approved by the shareholders at the annual general meeting and then paid out.