Unique transactions to Companies Flashcards
Two major classes of shares
- Ordinary shares
* Preference shares
Rights attached to ordinary shares
Shareholders get:
- Voting rights at Annual General Meeting(AGM)
- Get a share of the profits through unfixed dividends/dependent on financial results of company
- Proportion of value of company’s assets when it goes down
Issued shared capital
Number of shares that have actually been issued
Retained income
Income which is kept by company and not distributed to shareholders
Memorandum of Incorporation
Document required to form company
Sets out basic rules for how the company will be run
Shareholders
Owners of the company who put in capital
Shares
The means of dividing up of the capital of a company amongst the providers of the capital
Issue price
Price per share paid by shareholder
Directors
People appointed by shareholders at AGM to run the company
Earn Directors fees
Continuity
Company is a separate from shareholders and has own rights and duties.
Company’s life continues after the death of one of the owners
Assets of a company
Company has it’s own assets that don’t belong to shareholders
On liquidation, company shareholders share in division of assets
Liabilities for debts of company
Shareholders are not expected to pay for company’s debt
Ability to enter into contracts
A company has contractual liability and can do business with other legal personalities including shareholders
Independent auditors
Shareholders appoint to express and opinion, on the reliability of the financial statements
They are paid audit fees
Separation of ownership from control of a company
The company is owned by shareholders and run by directors
