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case law relating to dividendsthe above provisions of table a supplement the following common law rules1 losses in previous years
declaration and paymentthere is no provision in the act dealing with payment of dividends it is therefore governed by the provisions of the companys
dividendsas a commercial term the word dividends has a variable meaning which depends on the context in which it is used for purposes of company law
redemption of sharessection 60 1 empowers a company limited by shares to issue preference shares that are or may be at the option of the company are
liability of memberss72 1 provides that in the case of a reduction of share capital a member of the company so there past or present and shall not be
protection of general publicit may happen that a resolution reducing a companys capital was passed in circumstances which indicate that the
protection of creditorswhere the reduction of capital involves diminution of unpaid capital or repayment to shareholders of paid-up capital creditors
function of the courtin scottish insurance corporation ltd v wilsons amp clyde coal co lord simmons statedbut important though its task is to see
mode of reductions68 1 expressly states that a company may reduce its capital in any way there is therefore no statutorily prescribed mode of
reduction of capital 41 the general rule is that it is illegal for a company to reduce its capital this is so because such a reduction would be
mode of alteration the alteration of capital may be made by -1 increasing the companys share capital by new shares of such amount as the
alteration of capitala company is empowered by s63 to alter the provisions of its memorandum of association which relates to its registered or
exceptions of merger accountings56 1 permits a company to give financial assistance for a purchase of or subscription for its shares in the following
financial assistance for purchase of own sharesi financial assistance for purchase of own sharess56 1 of the act renders it unlawful for a company to
rules for purchase of own sharesso now next despite the rule in trevor v whitworth a company may purchase or acquire its own shares in the following
purchase of own sharesanother possible way in which a companys paid-up capital may leave the company other than in the ordinary course of the
merger accountingit may happen that during a take-over of one company a by another company b shares in the latter company are issued to shareholders
shares issued at a premiuma company may at times issue its shares at a price above their nominal value ie at a premium this may be necessitated by
provisions which prevent capital going out of the companyin trevor v whitworth 1887 lord watson statedpaid-up capital may be diminished or lost in
brokeragebrokerage is a payment made by a company to a broker or brokers in consideration for placing the companys shares it differs from
payment of underwriting commissiona commission is defined by osborns concise law dictionary as inter alia an agents remuneration therefore purposes
issue is sanctioned by the court - allotment of sharesnot less than one year has elapsed since the company was entitled to commence businessthis
issuing shares at a discountin ooregum gold mining co of india ltd v roper 45 the house of lords held that it is illegal for a limited company to
maintenance of capitalthe issued share capital of a company limited by shares is the primary security for the companys creditors in re exchange
minimum subscription - commencement of businessif the minimum subscription was not raised the company can only commence business or exercise