5/18/2011 COMPANY LAW II Share Capital Part 2 Consideration for issue of shares ·Issue price. Issue at a premium:above par. Share premium account:see s 488. Issue at a discount:below par. Ooregum Gold Mining Co of India v Roper [1892] AC125 ■C0ss46,50 Partly paid and fully paid shares
5/18/2011 1 1 COMPANY LAW II Share Capital Part 2 2 Consideration for issue of shares • Issue price. • Issue at a premium: above par. Share premium account: see s 488. • Issue at a discount: below par. Ooregum Gold Mining Co of India v Roper [1892] AC 125 CO ss 46, 50 • Partly paid and fully paid shares
5/18/2011 Consideration for issue of shares Non-cash consideration. Re Wragg Ltd [1897]1 Ch 796(Court of Appeal) Lindley U:difference between two types of transactions Principle: Court's approach: Lindley U and Smith U's difference on "colourable" Cf:Re Bradford Investment plc(No 2)[1991]BCLC 688 Question:why is the ruling different from Wragg? Transfer of shares ·General procedure.. When does purchaser become member? International Credit and Investment Co(Overseas) Ltd.v Adham [1994]1 BCLC 66 2
5/18/2011 2 3 Consideration for issue of shares • Non-cash consideration. Re Wragg Ltd [1897] 1 Ch 796 (Court of Appeal) Lindley LJ: difference between two types of transactions Principle: Court’s approach: Lindley LJ and Smith LJ’s difference on “colourable” Cf: Re Bradford Investment plc (No 2) [1991] BCLC 688 Question: why is the ruling different from Wragg? 4 Transfer of shares • General procedure. • When does purchaser become member? • International Credit and Investment Co (Overseas) Ltd. v Adham [1994] 1 BCLC 66
5/18/2011 Transfer of shares What are the rights of the vendor and purchaser prior to registration? Hawks v McArthur [1951]1 All ER 22 (Chancery Division) 。AcArthur Hawks ■AcArthur→Roberts ■AcArthur→Fraser What rights Hawks,McArthur,Roberts and Fraser each has? Who ranks before whom? ■Vaisey J:why? Practical value of the ruling: Transfer of shares Cf:Re Rose [1949]Ch 78 and [1952]Ch 499 >Gratuitous transfer of shares Cf:Milroy v Lord (1862)4 De GF J 264 >A gift of shares by deed 3
5/18/2011 3 5 Transfer of shares • What are the rights of the vendor and purchaser prior to registration? • Hawks v McArthur [1951] 1 All ER 22 (Chancery Division) McArthur Hawks McArthur Roberts McArthur Fraser What rights Hawks, McArthur, Roberts and Fraser each has? Who ranks before whom? Vaisey J: why? Practical value of the ruling: 6 Transfer of shares Cf: Re Rose [1949] Ch 78 and [1952] Ch 499 Gratuitous transfer of shares Cf: Milroy v Lord (1862) 4 De GF & J 264 A gift of shares by deed
5/18/2011 Transfer of shares Can directors refuse registration of the transfer? ·Table A pt ll reg3. ■Re Smith and Fawcett Simon Fireman v Golden Rice Bowl Private companies and s 29. Fraudulent transfers. Maintenance of capital Requirement of maintenance of capital. ·Why? 4
5/18/2011 4 7 Transfer of shares • Can directors refuse registration of the transfer? Table A pt II reg 3. Re Smith and Fawcett Simon Fireman v Golden Rice Bowl • Private companies and s 29. • Fraudulent transfers. 8 Maintenance of capital • Requirement of maintenance of capital. • Why?
5/18/2011 Financial assistance for purchase of own shares Restriction imposed on company under s 47A. Consequences of breach. ·“Financial assistance”that is prohibited:s47B. Egs: Gifts. Loans. Guarantees. Meaning of financial assistance Any transaction for the purpose of financing the acquisition may involve provision of financial assistance:Belmont Finance Corp Ltd.v Williams Furniture Ltd.[1979]Ch 250 (Court of Appeal) 10 夕
5/18/2011 5 9 Financial assistance for purchase of own shares • Restriction imposed on company under s 47A. • Consequences of breach. • “Financial assistance” that is prohibited: s 47B. Egs: - Gifts. - Loans. - Guarantees. 10 Meaning of financial assistance • Any transaction for the purpose of financing the acquisition may involve provision of financial assistance: Belmont Finance Corp Ltd. v Williams Furniture Ltd. [1979] Ch 250 (Court of Appeal)