Shares – McMahon Legal (Solicitors)

Share Transfers

Transfer of Shares I The Companies Act 2014 Act re-enacted the earlier provisions on the transfer and transmission of shares and debentures. An instrument of transfer must be executed, by or on behalf of the transferor. … Read the rest

Share Registers

Share Certificates Share certificates are evidence of the shareholder’s title to his shares. They are issued under the common seal of the company. They are generally required to be delivered on the transfer of the shares.… Read the rest

Schemes of Arrangement

Arrangements in Winding Up Where a company is proposed to be wound up or is in the course of being wound up in a members’ voluntary liquidation, the whole or any part of its business or property may be transferred or sold to another company or undertaking and the liquidator may in compensation or part compensation for the transfer or sale, receive shares, or like interests in the transferee company for distribution to the members of the transferor company.… Read the rest

Reorganisations

Corporate Reorganisation The 2014 Act made new provision in relation to the reorganisation of a company’s capital and undertaking. A limited company may enter a transaction by which its assets, undertakings or liabilities are transferred to another company or body corporate, in return for shares or securities of that body corporate being issued to the shareholders of the company or its holding company.… Read the rest

Reduction in Capital

2014 Act Reforms Because a reduction of the issued share capital may (theoretically in many cases) jeopardise the creditors, it is tightly controlled. The conditions and restrictions are designed to preserve capital and protect creditors. The 2014 Act simplified the procedures for the reduction of share capital.… Read the rest

Overview of Shares

Nature of Shares I Shares are assets and are the subject of property rights. They enjoy the constitutional protection of property and the guarantee against the abolition of private property. Although they are founded on a deemed contract between the members in the constitution (formerly the memorandum and articles of association) they are proprietary in nature. … Read the rest

Mergers

Private Company Mergers I There are separate provisions applicable to mergers involving PLCs and to mergers where none of the companies is a PLC, or at least one of the merging companies is a private company limited by shares.… Read the rest

Financial Assistance

Prohibition on Financial Assistance The policy of capital maintenance and protection is supported by the prohibition on companies assisting in financing the acquisition of their own shares. The prohibition on financial assistance is wide-ranging and may apply to a wider range of transactions than might first appear.… Read the rest

Distributions

Entitlement to Dividend There is no automatic entitlement to a dividend. It is usually a matter for the directors to decide whether to propose a dividend and if so how much should be paid.The default position provides that the right to a dividend arises only when declared by the directors and confirmed by the members at the annual general meeting.… Read the rest

Capital Protection

Capital Protection Rules In one sense, the capital of the company is a fund available for creditors. It is not available to shareholders, other than on winding up after all creditors/ debt holders have been paid in full. … Read the rest