22. The doctrine of capital maintenance

2021 ◽  
pp. 531-583
Author(s):  
Brenda Hannigan
Keyword(s):  
Common Law ◽  
Financial Assistance ◽  
Capital Maintenance ◽  
Distribution Rules ◽  
The Common ◽  
A Company

This chapter discusses the doctrine of capital maintenance which precludes the return of capital, directly or indirectly, to the shareholders ahead of a winding up of the company. The discussion covers the purchase and redemption of a company’s own shares, reduction of capital, distributions to the members, and financial assistance by a company for the acquisition of its own shares. Purchase and redemption schemes (buy-backs) are common transactions and are discussed in detail as is the procedure for a reduction of capital. The key issue for creditors, however, is the risk posed by distributions to members and much of the chapter is devoted to discussing the distribution rules laid down in CA 2006, Part 23 and the common law. The chapter discusses the rules as to distributable profits and the liability of directors in the case of improper distributions and, in particular, their liability for dividends improperly declared.

10. Distributions and maintenance of capital

2019 ◽  
pp. 252-281
Author(s):  
Derek French
Keyword(s):  
General Principle ◽  
Common Law ◽  
Court Cases ◽  
Share Capital ◽  
Capital Transfer ◽  
The Common ◽  
A Company

This chapter examines the controls imposed on return of a company’s capital to its members, first by considering the common law general principle that return of capital to shareholders is illegal unless permitted by statute. It then discusses the problem of how to distinguish between a legal distribution of profits and an illegal return of capital; transfer of profits to a capital redemption reserve and use of profits to pay up bonus shares; company’s issuance and redemption of redeemable shares or purchase of its own shares; purchased shares as treasury shares; and how a company may reduce its issued share capital by special resolution. The chapter also looks at capitalisations and employees’ share schemes. It includes analysis of three court cases that are particularly significant to distributions and the maintenance of capital.

9. Share Capital

2020 ◽  
pp. 163-178
Author(s):  
Imogen Moore
Keyword(s):  
Financial Assistance ◽  
Capital Maintenance ◽  
Private Companies ◽  
Public And Private ◽  
Share Capital ◽  
Statutory Law ◽  
Questions And Answers ◽  
The Law ◽  
A Company

The Concentrate Questions and Answers series offers the best preparation for tackling exam questions and coursework. Each book includes typical questions, suggested answers with commentary, illustrative diagrams, guidance on how to develop your answer, suggestions for further reading, and advice on exams and coursework. This chapter examines the law on share capital for public and private companies. The doctrine of capital maintenance ensures that the company has raised the capital it claims to have raised; and that the capital is not subsequently returned, directly or indirectly, to the shareholders. There is a great deal of (mainly statutory) law surrounding this doctrine This chapter considers the capital maintenance doctrine itself and many related topics, including: the issue of shares for non-cash consideration, issue of shares at a discount, reduction of capital, purchase of a company’s own shares, redeemable shares, payment of dividends, and financial assistance by a company for the purchase of its own shares.

3. The constitution of the company

2020 ◽  
pp. 43-60
Author(s):  
Lee Roach
Keyword(s):  
Common Law ◽  
Essential Information ◽  
The Common ◽  
A Company

Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter discusses the company constitution. A company’s constitution consists primarily of the articles of association and agreements and resolutions affecting the company’s constitution. The constitution forms a statutory contract between the company and its members, and between the members themselves, but only those provisions relating to membership rights will constitute terms of the statutory contract. A company can alter its articles by passing a special resolution, although statute and the common law restrict a company’s ability to alter its articles.

9. Share Capital

2018 ◽  
Author(s):  
Imogen Moore
Keyword(s):  
Financial Assistance ◽  
Capital Maintenance ◽  
Share Capital ◽  
Statutory Law ◽  
Questions And Answers ◽  
The Law ◽  
A Company

The Concentrate Questions and Answers series offers the best preparation for tackling exam questions and coursework. Each book includes typical questions, suggested answers with commentary, illustrative diagrams, guidance on how to develop your answer, suggestions for further reading, and advice on exams and coursework. This chapter examines the law on share capital. The doctrine of capital maintenance ensures that the company has raised the capital it claims to have raised; and that the capital is not subsequently returned, directly or indirectly, to the shareholders. There is a great deal of (mainly statutory) law surrounding this doctrine This chapter considers the capital maintenance doctrine itself and many related topics, including: the issue of shares for non-cash consideration; issue of shares at a discount; reduction of capital; purchase of a company’s own shares; redeemable shares; payment of dividends; and financial assistance by a company for the purchase of its own shares.

The Concept of a Meeting and Quorum

2020 ◽  
Author(s):  
Leslie Kosmin ◽  
Catherine Roberts
Keyword(s):  
Common Law ◽  
Orderly Fashion ◽  
The Common ◽  
The Creation ◽  
Regular Manner ◽  
A Company

The need to hold a meeting will arise in many different and diverse situations. All meetings are subject to procedural rules and regulations of the particular institution that has convened the meeting. The reason why there are rules and regulations is so that the participants at a duly convened meeting can transact business in a lawful manner and so that they will be able to debate and discuss issues in an orderly fashion. This book is concerned with the meetings of solvent companies that are registered and incorporated under the statutory provisions regulating companies. The reason for the requirement for meetings under the Companies Act 2006 (CA 2006) is so that the members can attend either in person or by proxy in order to debate and vote on matters affecting the affairs of a company. There are a number of procedures, some that are derived from the common law and others that are the creation of statute, that have to be observed in order for a meeting of a company to transact business in a lawful and regular manner.

9. Share Capital

2016 ◽  
Author(s):  
Imogen Moore
Keyword(s):  
Financial Assistance ◽  
Capital Maintenance ◽  
Share Capital ◽  
Statutory Law ◽  
Questions And Answers ◽  
The Law ◽  
A Company

The Concentrate Questions and Answers series offers the best preparation for tackling exam questions and coursework. Each book includes typical questions, suggested answers with commentary, illustrative diagrams, guidance on how to develop your answer, suggestions for further reading, and advice on exams and coursework. This chapter examines the law on share capital. The doctrine of capital maintenance ensures that the company has raised the capital it claims to have raised; and that the capital is not subsequently returned, directly or indirectly, to the shareholders. There is a great deal of (mainly statutory) law surrounding this doctrine This chapter considers the capital maintenance doctrine itself and many related topics, including the issue of shares for non-cash consideration; issue of shares at a discount; reduction of capital; purchase of a company’s own shares; redeemable shares; payment of dividends; and financial assistance by a company for the purchase of its own shares.

4. Promoters and pre-incorporation contracts

2016 ◽  
Author(s):  
Alan Dignam ◽  
John Lowry
Keyword(s):  
Common Law ◽  
Legal Aspects ◽  
Freedom Of Establishment ◽  
Fiduciary Duties ◽  
The Core ◽  
The Subject ◽  
The Common ◽  
A Company ◽  
Corporate Mobility

Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter focuses on one area where the motives of ‘promoters’ (that is, those who form a company) are relevant to the legal aspects of certain activities carried out in the company’s name, especially when they enter into contracts for the company prior to its formal registration. After defining the term ‘promoter’, the chapter discusses the fiduciary duties of promoters and the range of remedies available to the company against a promoter who breaches his fiduciary duties. It then considers problems involving contracts entered into prior to incorporation and the common law position on such contracts. It also explains pre-incorporation contracts, deeds, and obligations under Section 51 of Companies Act 2006 before concluding with an analysis of the issue of corporate mobility in relation to the freedom of establishment.

4. Promoters and pre-incorporation contracts

2018 ◽  
Author(s):  
Alan Dignam ◽  
John Lowry
Keyword(s):  
Common Law ◽  
Legal Aspects ◽  
Freedom Of Establishment ◽  
Fiduciary Duties ◽  
The Core ◽  
The Subject ◽  
The Common ◽  
A Company ◽  
Corporate Mobility

Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter focuses on one area where the motives of ‘promoters’ (that is, those who form a company) are relevant to the legal aspects of certain activities carried out in the company’s name, especially when they enter into contracts for the company prior to its formal registration. After defining the term ‘promoter’, the chapter discusses the fiduciary duties of promoters and the range of remedies available to the company against a promoter who breaches his fiduciary duties. It then considers problems involving contracts entered into prior to incorporation and the common law position on such contracts. It also explains pre-incorporation contracts, deeds, and obligations under Section 51 of Companies Act 2006 before concluding with an analysis of the issue of corporate mobility in relation to the freedom of establishment.

Employment Law in Context

2020 ◽  
Author(s):  
David Cabrelli
Keyword(s):  
Common Law ◽  
Historical Context ◽  
Employment Law ◽  
Labour Law ◽  
Practical Applications ◽  
The Social ◽  
The Common ◽  
Employment Rights ◽  
A Company

Employment Law in Context combines extracts from leading cases, articles, and books with commentary to provide a full critical understanding of employment law. As well as providing a grounding in individual labour law, this title offers detailed analysis of the social, economic, political, and historical context in which employment law operates, drawing attention to key and current areas of debate. An innovative running case study contextualizes employment law and demonstrates its practical applications by following the life-cycle of a company from incorporation, through expansion, to liquidation. Reflection points and further reading suggestions are included. The volume is divided into eight main Parts. The first Part provides an introduction to employment law. The next Part looks at the constitution of employment and personal work contracts. This is followed by Part III, which examines the content of the personal employment contract and the obligations imposed by the common law on employers and employees. The fourth Part is about statutory employment rights. The fifth Part covers equality law. Part VI looks at the common law and statutory regulation of dismissals. The Part that follows considers business reorganizations, consultation, and insolvency. Finally, Part VIII describes collective labour law.

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