Ownership Flashcards
Share capital
Money invested by shareholders to become owners of a company
When does membership begin?
When member’s name is entered into the company’s resister of members
S. 112(2) CA 2006
Who are subscribers
The first shareholders of a company
They subscribe to the company’s memorandum of association
What is nominal value
- also called par value
minimum subscription price for a particular share
Represents a unit of ownership
Shares in a limited company must have a fixed nominal value
Shares cannot be issued at a discount to nominal value
Premium- excess paid over nominal value
Issued share capital
Nominal + premium value
Total amount in value of ALL shares in issue at a particular time
Can new shares be issued at any time?
Yes
Define allotment
S. 558 CA 2006
Shares are allotted when a personal acquires the unconditional right to be included in the company’s register of members in respect to those shares.
Different to issues shares: shares are issued when the share holder has actually been registered in the register of members and their title has become complete. Then form part of company’s issued share capital.
Paid up share capital
Amount paid
Not necessary for SH to pay full amount due immediately
(Outstanding amount can be demanded by company at any time- at which point payment considered “called”)
Can a company be a shareholder?
Yes.
Separate legal entity, can own property in its own name
The shares company A owns in company B are ASSETS (will appear as assets in A’s accounts)
Parent/holding + subsidiary = group
PSC
People with Significant Control
Individuals
- own MORE that 25% of shares/voting rights
or - has the power to appoint or remove a MAJORITY of the board of directors
or - Exercises “significant influence or control” over the company
Every company must maintain a register of its PSCs and this must be open to public inspection
ss. 790A - 790ZG CA 2006
PSC Register must also be filled at Companies House along with company’s confirmation statement
RLE
Relevant legal entity:
- Satisfy 1 of PSC conditions
2 Required to keep a PSC register
(or be listed on a EEA regulated market/ subject to equivalent overseas regime)
- where there is a chain of ownership (I.e. group companies) only RLEs DIRECTLY above the company are registrable
What is shareholder liability?
Limited liability
Limited to amount (if any) unpaid on shares
Total nominal value of shares held by SH = total SH liability if company becomes insolvent
