Shares

The Companies Act 2014 re-enacts provisions regarding the transfer and transmission of shares and debentures, requiring an executed instrument of transfer for registration. The company deals only with legal ownership, ignoring trusts or equitable interests. A transferor remains the registered shareholder until the transferee’s name is entered into the register, which is updated upon submission of the transfer instrument, old share certificate, and payment of stamp duty at 1%.… Read the rest

Share certificates serve as evidence of a shareholder’s title to their shares and are typically issued under the company’s common seal. While not documents of title in the strictest sense, they act as presumptive evidence of ownership and are often required for share transfers.… Read the rest

The Companies Act 2014 facilitates the winding up and reorganisation of companies, allowing for the transfer or sale of assets and businesses to other companies. A liquidator can receive shares or other interests in a transferee company as compensation for distribution to members of the company being wound up.… Read the rest

The Companies Act 2014 introduced provisions for corporate reorganisation, enabling limited companies to transfer assets, undertakings, or liabilities to another body corporate in exchange for shares or securities issued directly to the shareholders. This reorganisation can proceed without distributable reserves if approved through the Summary Approval Procedure (SAP) or by a special resolution confirmed by the court.… Read the rest

The Companies Act 2014 introduced significant reforms to simplify the reduction of share capital while maintaining creditor protections. Previously requiring court approval, private companies can now reduce share capital using the Summary Approval Procedure (SAP) as an alternative.… Read the rest

Shares are intangible property rights and represent ownership of a company, offering constitutional protection as personal property. While shareholders are deemed owners, they hold no direct interest in the company’s assets, which belong to the company as a separate legal entity.… Read the rest

The Companies Act 2014 provides detailed procedures for private company mergers, allowing mergers by acquisition, absorption, or the formation of a new company. Mergers can be effected through the Summary Approval Procedure (SAP) if unanimous shareholder approval is obtained, or alternatively, through High Court confirmation.… Read the rest

The prohibition on financial assistance prevents companies from financing the acquisition of their own shares, reflecting the policy of capital maintenance. Financial assistance is broadly defined and includes loans, guarantees, and securities, whether direct or indirect.… Read the rest

Dividends are not an automatic entitlement and typically depend on directors’ recommendations, subject to confirmation at the annual general meeting (AGM). Interim dividends may be declared between AGMs at directors’ discretion. Dividends may only be paid out of distributable profits, ensuring the company’s financial health.… Read the rest

Capital protection rules ensure that a company’s capital is preserved as a fund for creditors and is unavailable to shareholders except on winding up, after creditors are fully paid. These rules, originally developed under common law and reinforced by legislation, prohibit transactions that would improperly reduce capital, such as unauthorised distributions or share buybacks.… Read the rest