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The Middle Of The 19th Century

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Introduction
The middle of the 19th century, it was thought to be an unexceptional practice if a company’s purchase of its own shares back. However, the point of view against the continued existence of the power began to grow in force after the advancement of the model of limited liability. The ruling out on share repurchases was as a final point added into the common law in Trevor v Whithworth. The prevention was afterward enacted in companies’ legislation in England and subsequently in the different Commonwealth countries, as well as Australia. The Act integrated two requirements of particular consideration to the Lords. Firstly, there was a condition that the company should give its nominal capital. Secondly, the legislation provided for an all-inclusive practice for reducing capital and the assets of the company.
It is an essential reason of corporate law that the share capital of a company should be maintained. Nonetheless, a corporation limited by shares is open to shrink its share capital by a ruling of its members provided that the decrease is not prohibited by its Bylaws and Memorandum of Association and the company act in accordance with the procedures set out in the Corporation Act 2001. The concept of reduction in share capital is delineated as the method of lessening a company 's shareholder equity through share cancellations and buy-backs. The reduction of funds is done by companies for several reasons as well as the increasing value of shareholder and

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