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431259
Share Capital/Capital Maintenance
Description
Company Law Mind Map on Share Capital/Capital Maintenance, created by 40055097 on 10/12/2013.
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company law
company law
Mind Map by
40055097
, updated more than 1 year ago
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Created by
40055097
over 10 years ago
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Resource summary
Share Capital/Capital Maintenance
Advantages of alloting shares
pre emption rights maintain existing holders equity
Cheaper to service than loans
more flexible
able to design
Allotment
private company with 1 class
directors have unlimited authority
s549
authority for up to 5 years needed
s551
consider pre-emption rights
unless authority not to
s569
must not be issued at a discount
s552
Plc's cannot issue in transfer for services
s585
non cash provisions
s593-609
Transfers
normally to whomever the transferor wishes
directors
register transfers
tell members if not
s777(1)
if unjustified new member can apply for rectification of register
s1225
Smith v Fawcett
exercise good faith in transfer
Stamp Duty
0.5%
minimum £500
Share Certificates
prima facie evidence of right
cannot deny rights not a holder
CREST
nominees hold electronic form
Reduction of Capital
why?
too much capital
devaluation of assets
may be able to pay dividends again
court application
s641
editors entitled to object
s646
solvency statement
signed by directors
642
Not signed
court procedure
s641
liable if no reasonable grounds
s643(4)
shares do not exist
Re-Purchase
Why?
to get rid of a member
restore control
increase asset value per share
to deter takeover bid
departing employee
no other market for shares
method
Off-Market
s694-700
Private companies
off-market plcs
Market
s701
Financial Assistance
difficult unless benefits employees
Brady v Brady
Lord Oliver
requirment: best interests of the company
Dividends
only where accumulated realised profits > accumlated realised assets
Revalution not realised as not sold
Plc?
Net Asset Rule
s831
net assets > share capitcal
Bairstow v Queens Moat Houses
liable for unjustified dividends
s847
member too if known
Insider Dealing
s52 Criminal Justice Act 1993
exploits information for profit
defences
not expected result
information disclosed
Information did not influence
Squeeze out provisions
min < 10% has to sell in takeover
s974
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