The case study in question is associated with the area of Company Law. Company Law is concerned with the regulation of powers, rights, duties and liabilities of the company and constituencies that are closely linked to the company . Company Law incorporates the Companies Act 2006, which regulates the relationship between the company and its managers. The company is a separate legal entity, through the Articles of Association the powers of a company are designated and exercised by the board of directors on behalf of the company. In relation to this we must examine the specific areas of the authority for allotment of shares, grounds on which there may be objections and the procedure of the transfer of shares. Once each area has been fully scrutinized a conclusion can be determined on the legal situation. Allotment of Shares Shares within a company may be acquired by original acquisition . This is when new shares are issued to existing shareholders or third parties making them shareholders and members of the company. In reference to the Companies Act 2006, sections 549-551, regulates how the share capital of a company and the issue of new shares are to be dealt with. If a company were looking to expand, a method of injecting capital into a company would be by the allotment of shares. Every share must have a fixed nominal price; in S.542 (2) of the CA 2006 it is illustrated that if an allotment of shares does not have a fixed price then it will be invalid . If a company was registered under the Companies Act 1985 (or earlier), it will have an authorised capital figure in its memorandum of association. This is the maximum number of shares the company can allocate . If the intended allotment was to exceed the amount of authorised... ... middle of paper ... ..., the transferee would have been fully aware of the existence the pre-emption rights. In the case of a courts view it may be held that a fraudulent agreement had taken place as they were aware of the existence of the pre-emption rights agreement and that minority shareholders may have had the intention to invoke the these rights under section 561 of the CA 2006. If the allotment of shares were to take place Peter and Michael would object to this, as it would result in a dilution of their shares and render the shares less valuable. Finally in relation to Peter transferring his shares to Verity, as long as the proper procedure for the transfer of shares in performed in accordance with section 771 of the CA 2006, then once the share certificate has been produced to Verity and the updated shares are entered into the Register of Members then the transfer is fully legal.
R v International Stock Exchange of the UK and the Republic of Ireland Ltd, ex p Else (1982) Ltd and others [1993] 2 CMLR 677
For example if ABC Goods had 1 million shares and they all cost R10 their market cap would cost R10million that is basically the cost of the company and how much you can offer to buy the company and the shareholders should be okay with it and it can also refer to the total amount of the stock exchange
Outstanding shares are all the stocks that are currently held by investors including the restricted shares that are owned by the organizations on the inside as...
A rights issue is an issue of rights to purchase new shares, which are issued pro rata to the existing shareholders, Armitage (2007). Rights issues were the dominate form of seasoned equity offers for fund raising in the United Sates and the United Kingdom . However, there has been a swing to other forms of share issues. The US has shifted towards firm commitments, Eckbo and Masulis (1992). In this the underwriter guarantees the sale of the issued stock at the agreed-upon price. The shift in the US occurred in the 1960’s. In the UK there has been a move towards open offers. Open offers are similar to rights issues but investors are unable to sell the stocks that they purchase under the open offer to other parties. The change in the UK occurred much later than the US, with the shift occurring in the 1990’s.
This company will exist for a set term of 20 years (which can be amended by a majority vote). The company may be dissolved at any time by a unanimous vote of the members or with the fore-coming of any event that makes it unlawful or impossible to carry on the business of the company. If the company is to be dissolved, the manager will wind up the company's affairs. On winding up of the company, the assets of the company shall be distributed according the following priority:
The market value is not affected by the firm’s capital structure, that’s what the M&M first proposition stated; in proposition one it is stated that under certain conditions the firm’s debt equity has got no effect on the firm’s market value. This approach is based on the below:
The unfair prejudice petition has always been regarded as the easier and more flexible option for minority shareholders’ protection compared to the statutory derivative action. The restrictive leave requirements under the statutory derivative claim where the concept of prima facie, good faith and ratification have been interpreted within the confines of the origins in the case of Foss v Harbottle do not add any appeal the statutory derivative claim. Further, the approach in relation to granting indemnity costs orders which is rather limited does not in any way encourage any potential claimant to pursue a derivative action. Recent cases which allows corporate relief to be obtained via unfair prejudice petition and even the possibility if recovering costs under and unfair prejudice petition has further relegated the significance of the derivative action.
Given all the above, there are only two ways to provide ownership interests for these new employees; both methods involve diluting the percentage interest of the current shareholders, hopefully to generate the larger absolute value created by the incentive of broad ownership. The first method is to use newly issued shares of company stock either as a direct contribution medium or through additional leveraging to finance other corporate activities.
The whole acquisition was proposed to be funded by its own cash resources and loans raised by Tata Steel and with its subsidiary companies formed for the purpose of this acquisition.
There is unlimited space for growth in a public company due to the allowance of unlimited shares being sold allowing that money to be injected into a capital fund to help with the expansion and growth of the business.
Currently, directors have no prima facie entitlement to be remunerated for their work (Hutton v West Cork Railway Co 1883), but Article 23 of the Companies (Model Articles) Regulations 2008 establishes that it is for directors to decide the lev...
Some clauses in this regard often found in a Shareholders’ Agreement to regulate the transfer of shares
The enhancement of Rs.9 croreswill be solely used for the purpose of acquisition of paid stocks of the said unit. No assets and liabilities relating to the said unit will be taken over by PRIL.
[7] Cavendish Lawcards Series (2002) Company Law (3rd edn), p.15 [8] [1976] 3 All ER 462, CA. [9] Griffin, S. (1996) Company Law Fundamental Principles (2nd edn), p.19 [10] [1990] Ch 433. [11] Lecture notes [12] Lecture notes [13] [1939] 4 All ER 116.
Corporate law is an area of law that directly relates to dealings with corporations within our legal system. “In Ontario, law compromises of statutes, regulations and cases. This means that to understand the law in any area, you must familiarize yourself with the statute or statutes that relate to that area, check related regulations where required, and read cases that show you how the courts have applied those statutes and regulations in real life situations” (Corporate Law for Ontario Businesses, 2012, pg. 2). In this paper I will be doing just that. I am going to be looking at a particular case that happened and examine how the courts applied legal regulations to a real life situation. I will also be examining what it means for a corporation to be a separate legal entity, as well as the level of importance a shareholder has within a company. All of these topics directly relate to the case I will be examining and are important to knowing in order to understand why the court made the decision that they did. Lastly, I will be discussing my own personal opinions on the case and the decision made by the courts.