Business enterprise law study unit 8 notes

BUSINESS'ENTERPRISES'LAW'''''''''''''

STUDY'UNIT'8 CORPORATE CAPITAL AND
FINANCE – PART 1

,Corporate(finance
!Companies*are*primarily*financed*in*2*ways:

! Debt
!Loans8*Lease*agreements8*Credit*terms8*Overdraft*facilities8
!Debt*Instruments

OR
! Equity
!Shares
!Retained*Income

,Capital'structure:'Shares
• Shares(definition((S(1):(One(of(the(units(into(which(the(
proprietary(interest(of(a(profit(company(is(divided.
• Nature(of(a(share
• Authorised(shares((versus(issued(shares)
• Number(and(classes(of(shares(in(MOI
• Distinguishing(designation
• Classes(and(rights(set(out(in(MOI
• Ordinary(shares
• Preference(Shares
• Number(of(unclassified(shares
• Class(of(blank(shares

, Flexibility
• Special,*conditional*or*limited*voting*rights
• Redeemable*or*convertible*shares,*any*class
• Option*of*company,*shareholder,*another*person
• For*cash,*indebtedness,*securities,*property
• At*prices/amounts*specified*or*formula
• Terms*in*MOI
• Dividends*calculated*any*manner
• Dividends*cumulative,*nonBcumulative,*partially*
cumulative*
• Preferential*distribution/liquidation*rights