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50 Cards in this Set
- Front
- Back
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Minimum capital requirement case |
Centros case |
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Minimum capital requirements - EC Treaty articles |
52&58 |
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Minimum capital requirement - argument for |
Protecting the creditors by anticipating the risks of fraudulent bankrupcy due to insolvency of companies with inadequate initial capitalization. |
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Ooregum Gold Mining Co of India v Roper |
Shares may not be allotted at less than their par value or at discount - now ss. 552&580 CA
A court could not intervene if a company had, by issuing shared, overpaid for property, and would only intervene if the transaction was fraudulent. Par value requirement was deemed to be important because it allowed the creditors to ascertain the fixed and certain amount of capital that they were entitled to regard as their security. However, later rules that required companies to treat all amounts raised through share issuance as capital decreased that significance. |
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Scottish Insurance v Wilson&Clyde Co |
Default capital rights of preference shares - what's in articles is exhaustive. But if preference shares carry a preferential right in relation to return of capital on insolvency, same will apply on a reduction of share capital. |
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Where the rights conveyed by shares are explained in the articles, that is likely to be an exhaustive statement. |
Scottish Insurance v Wilson & Clyde Coal |
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New shares ranking pari passu with old ones do not vary the class rights of the old shares |
White v Bristol Aerospace Co |
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New shares ranking pari passu with old ones do not vary the class rights of the old shares |
White v Bristol Aerospace Company |
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Sets out three main categories of special rights that may exist. |
Cumbrian Newspaper Group |
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Cumbrian Newspaper Co. |
Sets out three main categories of special rights that may exist: 1) Rights annexed to shares 2) Rights for particular people under the constitution 3) Rights unattached to particular shares but conferring a benefit on a group of members |
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Removal of director by 50% of the shareholders where the director holds over 50% of the shares |
Bushwell v Faith |
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Definition of a share case |
Borland's Trustee v Steel Brother&Co Ltd - Lord Farewell |
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Definition from Borland's Trustee v Steel Brother & Co Ltd |
A share is an interest of the shareholder in the company measured by a sum of money for the purpose of liability in the first place, and an interest in the second. A share is not a sum of money, but is an interest measured by a sum of money and made up of various rights - Lord Farewell. |
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Cohen Committee - year |
1945 |
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Historical case where par value was deemed important |
Ooregum Gold Mining Co of India vs Roper |
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Cohen Committee - findings (3) |
- Much logic in arguments in support of having shares with no par value - No public demand for and considerable opposition to no par value shares - Concerns about possible abuse |
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1945 Committee |
Cohen |
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Gedge Committee - year |
1954 |
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Gedge Committee - purpose |
To answer the question whether shares with no par value should be permitted |
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Gedge Committee - advantages of no par value shares 5) |
1) Represent a share for what it is 2) If no nominal capital, why nominal share value 3) It is the capital employed, not the paid up share capital that is the true value of the undertaking 4) Simpler capital reorganisations 5) Can facilitate raising additional capital |
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1954 Committee |
Gedge Committee |
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Gedge committee - position on abuse |
- Acknowledged the need for safeguards against abuse - No par value shares are as likely to be abused as shares with a par value |
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Jenkins Committee - year |
1962 |
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Jenkins Committee - findings |
- Recommended that legislation should be introduced permitting no par value shares - Extended that to preference shares |
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Blair govt committee |
Company Law Review Steering Group |
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Company Law Review Steering Group |
- Recommended no par value shares for private companies - Concluded that UK's hands are bound by EU law in relation to public companies. |
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Art. 8 of the Second Company Law Directive |
Concept of "accountable par' |
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Concept of "accountable par" |
Second Company Law directive, Art. 8. |
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SLIM - Simpler Legislation |
A working group established by the European Commission examining the Second Company Law Directive. |
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A working group established by the European Commission examining the Second Company Law Directive. |
SLIM - Simpler Legislation |
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Nichol's case |
Lord Chitty - allottment of shared is equal to creating a binding contract to take the shared. |
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Lord Chitty - allottment of shared is equal to creating a binding contract to take the shared. |
Nichol's Case |
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Deferred share |
A share holding the restriction that no dividend can be paid to the shareholder for a financial year unless ordinary shareholders are paid a certain amount |
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Comission v Portugal 2002 |
An early example of the ECJ clamping down on golden shares. Allows to identify a broad notion of what is a golden share |
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Conmission v Belgium |
The ECJ laid down criteria against which state measures for exercising influence in privatised companies must be measured. 1) Identification of the interest 2) Proportional response |
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Commission v Belgium - which article? |
56 of the EC Treaty |
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Amending articles |
The shareholders may amend company's articles by a special resolution - 75%, except for entrenched provisions |
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Redeemable shares - regulation |
Companies generally prohibited from acquiring their own shares - s. 658 Redeemable shares permitted - s. 648 - but only if expressly permitted by the company's articles |
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Redeemable shares - definition |
Offer temporary membership in a company with repayment of the nominal value of the share, sometimes with the premium. The shares are redeemed and the membership comes to an end either at an end of a fixed period or at a company's option. |
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Preference share - definition |
Entitles the holder to benefit in priority to any dividend payments to any other company member. Unless otherwise stated, the right to receive dividend is "cumulative". Preference shares entitling to receive back capital on winding up in preference do not entitle to any surplus remaining from the capital. |
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Negative consequences of minority shareholder protection |
Pre-emption right waiting period proved to be an obstacle for banks seeking to raise capital fast in 2008 crisis. When it applied to private companies, pre-emption right proved to be overregulation. |
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Types of share (5) |
1. Ordinary/Equity share 2. Preference share 3. Redeemable share 4. Non-voting ordinary share 5. Deferred share |
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How are shares transferred? |
1) Price negotiation 2) The actual transfer of shares 3) Registration of the transfer |
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Reasons for minority shareholder protection (3) |
1) Wealth transfers 2) Control dilution 3) Distortion of market for unconstitutional behaviour by the directors |
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Pre-emption right - section |
s. 561 CA 2006 |
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Definition of allottment (plus section) |
S. 558 CA 2006 When a person acquires an unconditional right to be included in the company's register of members in relation to it. |
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Minimum par value - section |
542 |
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Ordinary/equity shares - sections and definition |
548/560 If there is no prior limit on the amount the holder of the share may receive in distribution, either as annual dividend or as distribution of surplus assets on winding up. |
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Rights conferred by shares (3) |
1) Voting rights 2) Capital rights 3) Income rights |
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Shares are personal (moveable) and not real (heritable) property - section |
541 |
