Week 8: Corporate Finance & Fundamental Transactions
Requirements to have shareholders
Company may not issue shares to itself (i.e. there have to be shareholders
other than the company itself)
- Must regulate the subsidiary shares because you essentially own shares
in yourself
- Cancel shares after a buy back
NPC does not have to have shareholders
Share Capital
Share
- One of the units into which the proprietary interest in a profit company
is dividend
- A share issued by a company is movable property, transferable in any
manner provided for or recognised by the Act or other legislation
- Interest of a shareholder in the company measured by a sum of
money, for the purpose of liability in the first place, and of interest in the
second, but also consisting of a series of mutual covenants entered
into by all the shareholders inter se
Shareholder
- The holder of a share issued by a company and who is entered as such
in the certificated or uncertificated securities register, as they may be.
No par value
Par value = nominal value of share. New Act does away with the concept
and states that a share does not have a nominal or par value. This was based
on the Capital Maintenance Rule. Par value shares in issue must be
converted.
Authorised Share Capital
MOI sets out the classes of shares, number of shares in each class and how
many the company is authorised to issue. It must also set out, with respect to
with each class of shares the preferences, rights, limitations and other terms
associated with that class.
Types
- Preference
Paid a fixed amount or percentage.
Participating get fixed amount and share in dividends received by
ordinary shareholders.
Cumulative are also entitled to what they would have been paid last year
(back-pay), dormant right to vote which will be used if deciding on a
matter that affects allocation of dividends.
- Deferred
Potential form of payment to senior employees and directors but they
receive dividends last.
Requirements to have shareholders
Company may not issue shares to itself (i.e. there have to be shareholders
other than the company itself)
- Must regulate the subsidiary shares because you essentially own shares
in yourself
- Cancel shares after a buy back
NPC does not have to have shareholders
Share Capital
Share
- One of the units into which the proprietary interest in a profit company
is dividend
- A share issued by a company is movable property, transferable in any
manner provided for or recognised by the Act or other legislation
- Interest of a shareholder in the company measured by a sum of
money, for the purpose of liability in the first place, and of interest in the
second, but also consisting of a series of mutual covenants entered
into by all the shareholders inter se
Shareholder
- The holder of a share issued by a company and who is entered as such
in the certificated or uncertificated securities register, as they may be.
No par value
Par value = nominal value of share. New Act does away with the concept
and states that a share does not have a nominal or par value. This was based
on the Capital Maintenance Rule. Par value shares in issue must be
converted.
Authorised Share Capital
MOI sets out the classes of shares, number of shares in each class and how
many the company is authorised to issue. It must also set out, with respect to
with each class of shares the preferences, rights, limitations and other terms
associated with that class.
Types
- Preference
Paid a fixed amount or percentage.
Participating get fixed amount and share in dividends received by
ordinary shareholders.
Cumulative are also entitled to what they would have been paid last year
(back-pay), dormant right to vote which will be used if deciding on a
matter that affects allocation of dividends.
- Deferred
Potential form of payment to senior employees and directors but they
receive dividends last.
