Week 13 - What is a Share?

Question 1

Shareholder =

Answer 1

Member

Question 2

What is a share?

Answer 2

A share is a bundle of rights and duties that the holder possesses in relation to the company and the other members

Question 3

What does CA 2006 s.540 define a shareholder as?

Answer 3

Defines a shareholder as having a share in the company’s capital

Question 4

A shareholder has both what towards the company?

Answer 4

A shareholder has both liability and rights towards the company

Question 5

s.542

Answer 5

Each share must have a value assigned to it - this is called its nominal value

Question 6

What does the ‘nominal’ value mean?

Answer 6

Minimum

Question 7

What can you not do after registering with that companies house and saying the nominal value?

Answer 7

You can never have those shares sold for any less than that nominal value

Question 8

What can happen if you do sell shares for less than the nominal value?

Answer 8

You are in breach of the law and could be expected to compensate the company for the difference

Question 9

What does shareholding give a member the rights to?

Answer 9

Gives the rights to share in the company profits, and a right to attend and vote at company meetings

Question 10

If a company winds up and there is surplus, where do shareholders come in the hierarchy?

Answer 10

Very bottom