Week 13 - Rights and Liabilities of Shareholders

Question 1

What is the liability of the shareholder?

Answer 1

Agreeing to pay the amount of capital agreed with the company, usually fully paid when the share is issued

Question 2

What are the rights of the shareholder?

Answer 2

A right to be able to transfer their shares, subject to any restrictions set out in the articles

Question 3

What are articles?

Answer 3

When you register the company, they are the rules set out that the company will follow

Question 4

What is a chose or thing in action?

Answer 4

An intangible right that affixes to those shares and investments (a right to sue)

Question 5

How can rights be enforced?

Answer 5

Rights can only be enforced by legal action, known as a ‘chose/thing in action’ (a right to sue)

Question 6

What are their first 2 rights?

Answer 6

• transfer shares
• attend and vote meetings - must be given notice

Question 7

What are their other 2 rights?

Answer 7

• dividends; a payment from profits - must have sufficient profits to do so
• see the accounts (can be financial statement not the full)