Sarah the Company Secretary of Beta Plc, The company is a non-listed public company. She seeks your advice on the following matters. a) The Company has 100,000 £1 preference shares and 500,000 £1 ordinary shares. The Articles of Association provide that the preference shares carry the right to a 12% preference divided and a prior right to the return of their capital on winding up. They have no right to reduce the preference divided from 12 to 8 percent. The company plans to allot an additional 30,000 ordinary shares with a nominal value of £1 to Roger for £1.30 each. Roger cannot afford to pay for the shares in full and has suggested that the company allows him to pay £1 per share, and that he acts as the Company legal advisor for the next three months in order to pay for the premium. Alternatively, he has suggested that the company get registered as a private limited company. Roger will then arrange a loan of £39,000 from his bank which will be guaranteed by the Company.
Sarah the Company Secretary of Beta Plc, The company is a non-listed public company. She seeks your advice on the following matters. a) The Company has 100,000 £1 preference shares and 500,000 £1 ordinary shares. The Articles of Association provide that the preference shares carry the right to a 12% preference divided and a prior right to the return of their capital on winding up. They have no right to reduce the preference divided from 12 to 8 percent. The company plans to allot an additional 30,000 ordinary shares with a nominal value of £1 to Roger for £1.30 each. Roger cannot afford to pay for the shares in full and has suggested that the company allows him to pay £1 per share, and that he acts as the Company legal advisor for the next three months in order to pay for the premium. Alternatively, he has suggested that the company get registered as a private limited company. Roger will then arrange a loan of £39,000 from his bank which will be guaranteed by the Company.
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter13: Corporations: Earning & Profits And Distributions
Section: Chapter Questions
Problem 31P
Related questions
Question
Sarah the Company Secretary of Beta Plc, The company is a non-listed public company. She seeks your advice on the following matters.
a) The Company has 100,000 £1 preference shares and 500,000 £1 ordinary shares. The Articles of Association provide that the preference shares carry the right to a 12% preference divided and a prior right to the return of their capital on winding up. They have no right to reduce the preference divided from 12 to 8 percent.
The company plans to allot an additional 30,000 ordinary shares with a nominal value of £1 to Roger for £1.30 each. Roger cannot afford to pay for the shares in full and has suggested that the company allows him to pay £1 per share, and that he acts as the Company legal advisor for the next three months in order to pay for the premium. Alternatively, he has suggested that the company get registered as a private limited company. Roger will then arrange a loan of £39,000 from his bank which will be guaranteed by the Company.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT