The Payment Of Dividends And The Issue Of Shares

Section 235: Power to acquire shares of shareholders dissenting from scheme or contract approved by majority

Can the company do this? Advise the company what it must do before issuing the new class of shares. You do not need to consider Chapter 6D of the Act or directors ' duties.

S198A(1): The board of directors has discretion as to when and how to issue shares

It is traditional to start considering the scope of the rule by reference to Buckley J's observation in Re Duomatic Ltd , ‘where all shareholders who have a right to attend and vote at a general meeting of the company assent to some matter which a general meeting of the company could carry into effect, that assent is as binding as a resolution in general meeting would be'. Undoubtedly, the rule is a doctrine of wide application, however, it must not be regarded as a cure for any failure to observe

When approving compensation for directors, officers and employees, contractors, and any other compensation contract or arrangement, in addition to complying with the conflict of interest requirements and policies contained in the preceding and following sections of this article as well as the preceding paragraphs of this section of this article, the board or a duly constituted compensation committee of the board shall also comply with the following additional requirements and procedures:

The company believes that the executives and directors should own the stocks. In order to be a stockholder,

In accordance with the agreement between the lender and Ace Inc., the payment of dividends cannot exceed the net income after taxes in correlation to the beginning of the contract. It is noted that the client is complying with said agreement that was put into effect. Note: The client can supply information that there is an actual retained earnings restriction because this can demonstrate misinformation to the auditor. Therefore, since the auditor was under the assumption that there was no restriction, it should be made apparent within the disclosure

When dividends are received, the amount is credited to the dividend revenue as they are regarded as a reduction in the investment made. Here the percentage of stocks purchased fall between 20 and 50 percent. For companies owning more than 50% of the total share, the consolidated financial statements are used. They include consolidated balance sheets, income statements, and cash flow statements. The equity method is used to account for the investment in the subsidiaries (Levy,

- Hold an annual meeting with its shareholders and other relatives in regard of distributing

A shareholder may apply to the court by petition on the ground that the company's affairs are being or have been conducted in a manner which is unfairly prejudicial to the interests of its shareholders generally or some of them (including at least the applicant), or that any proposed act or omission of the company would be so prejudicial(DOV OHRENSTEIN, 26th May

7-4 Approved shares are expressed in the organization 's corporate sanction which determines the greatest number of shares the firm can offer without accepting endorsement from the shareholders. At the point when approved shares are sold to the general population and are

shares can only be sold to new members if all shareholders agree that is why control of the company cannot be lost to outsiders (Hall et al, 2008).

Question 1 1. The maintenance of capital doctrine is developed to prohibit a company from reducing its share capital because a reduction in capital would reduce the pool of funds available to the company to pay its creditors. Section 254T provides that dividends are only payable out of profits. This provision ensures that capital is not return to shareholders in the form of dividend. The term “profit” is not defined in the Corporation Act. In Re Spanish Prospecting Co Ltd (1911), it was stated “profits” implies a comparison between the states of a business at 2 specific dates usually by an interval of a year which means the gain made by the business during the year. Section 259A prohibits a company directly acquiring its own

The Takeover Code also restricts the corporate actions of target companies during the offer period, such as transferring assets or entering into material contracts and prohibiting issue of any authorized but unissued securities during the offer period . Furthermore, the shareholder rights plan sanctions the target companies to issue shares at a discount and warrants which convert to shares at a discount, even without shareholder approval, which is illegal in the Indian context unlike the U.S. where companies are permitted to do so. The DIP Guidelines require the minimum issue price to be determined with reference to the market price of the shares on the date of issue or upon the date of exercise of the option against the warrants. Such issue must also be approved by shareholders. Without the ability to allow its shareholders to purchase discounted shares/options against warrants, an Indian company would not be in a position to dilute the stake of the hostile acquirer and also seeking shareholder approval in the event of a takeover attempt is a very time-consuming process, thereby making impossible poison pills to operate within the existing Indian legal framework. Apart from this, in the event of a takeover bid, all the directors of the target company may be removed in a single shareholders meeting, as permitted under the Companies Act, 1956, thus making futile the Staggered Board defence available to foreign companies.

“There are two main schools of thought in respect Dividend Policy: the Relevance Theories, and the Irrelevance Theories. Explain briefly"