Topic 4 Flashcards
1
Q
Nature of Shares - Rights conferred to shareholders
A
- right to participation when the company is a going concern
- right to participate in the company’s surplus assets
- obligation to contribute to the company’s assets upon winding up (only if the shares are not fully paid up)
2
Q
Capital
A
Money with which company operates. Registered amount stated in MOA as issued capital.
3
Q
Paid Up Capital
A
Part of issued capital which has been
- paid up in actual cash
- been exchanged for “consideration other than cash”
4
Q
Ordinary Shares Rights
A
- Right to share equally in any dividends
- Right to vote at a general meeting
- Right to be repaid the capital/pro rata share on winding up after other claimants have been paid
- Right to share pro rata in any asset upon winding up
5
Q
Preference Shares Rights
A
- Right to receive fixed dividends provide profits are available for distribution and dividends has been declared
- No/limited voting rights
- Right to be repaid the principal on winding up in priority to ordinary shareholders
- No right to share in surplus assets upon winding up
6
Q
Preference Shares can vote when
A
- during a period when any preferential dividend remains unpaid
- to pass a resolution which varies the rights attached to the preference share
- to pass a resolution to wind up company
7
Q
Subscribing for fresh shares
A
- Make application
- Company accept offer
- Issue relevant shares and applicant is put in control of shares
- Contract of subscription between company and applicant
8
Q
Purchasing existing shares
A
- Transfer of shares between persons
- Does not affect balance sheet
9
Q
Payment for shares
A
-Paid up in money’s worth
10
Q
Issue of redeemable preference shares
A
- Must be authorised by articles
- Shares must be fully paid up
- All directors have made a solvency statement in relation to such redemption
- The company lodged a copy of the solvency statement with registrar
- Will not be regarded as reduction of share capital (fresh shares)
11
Q
Cumulative Preference Share
A
- Entitled to dividend at fixed rate throughout the entire life of the company
- Non cumulative preference shares only entitled to dividend in a year company makes a profit
12
Q
Duties of company when issuing shares
A
- Register prospectus with registrar
- Notify ACRA within 2 weeks
13
Q
Prospectus
A
Laws which regulate the way in which a corporation may raise capital from public to protect potential investors.
- Required for all investments unless exempted
- Governed by MAS under SFA act
- Company must provide information in SFA
- Contains information that public needs to know to make an informed investment decision
- Give an indication of company’s area of business, key investment risks, how funds raised will be used, operating track record, prospects
14
Q
Prospectus 2
A
- MAS will register a prospectus within 14 to 28 days after issuer has lodged
- For review by MAS and SGX and public comment
- Signed by all directors
- Dated
15
Q
Refusal to register prospectus
A
- Contains false or misleading statement
- Omitted material information or does not comply with SFA
- Not in public interest to do so
- Aggrieved person may apply to Minister of Finance within 30 days
16
Q
Exemption
A
- If compliance is unduly burdensome
- Private placements <50 investors in 12 months
- Small offerings up to $5 million in 12 months
17
Q
Offences
A
- Inclusion of false/misleading statement can lead up to criminal or civil liability
- MAS can issue “stop order”
18
Q
Substantial Shareholder
A
- Natural or artificial person
- Has interest in more than 5% voting shares in public listed company
- Required to notify the company of his interests within two business days after becoming one
- Any change must be reported within 2 working days to company
