There are three types of preference shares:
1. Participating or non – participating shares
Once the sum specified by the firm has been paid to the preference shareholder, and then some amount to the ordinary shareholder, there can always have some extra profits which should be decide of how to share them among the shareholders. The issue arises when we think of the preferential shareholders of whether they should have a part in the surplus profits of the firm or not and a similar question arise is if the firm is wound up, they are known to get a share in the surplus profits of the firm then they are known as participating preference share. However generally the principle followed is that of non-participating preference shares where they are not entitled to the surplus being distributed to them. So generally we can say that the preference shareholders will get only the specified sum that was fixed for them and they also have the right of participation according to the terms of the Memorandum of Association or Articles of association unless it has been mentioned otherwise. In Scottish insurance corporation v. corporation Wilsons & Cyde coal co: the house of Lords noticed that the Articles of the Company is about to go into liquidation said specifically that in the occurrence of winding up reference stock would be getting a higher level or priority to the degree of the sum paid thereon. On the issue of whether the preference shareholders should get a part to a share in the surplus profits, Lord Simonds stated that such right shall depend on the contract with the firm in question, and in such cases, the preference shareholders got no right to take a share in the surplus.
2. Cumulative and non - cumulative shares.
Preference share ...
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...le preference shares, but only public companies can do this and not the private limited companies. In UK, few times if it chooses to, a firm is authorised to issue convertible shares that is preference share that is allow converting to ordinary shares, the shareholder may make a choice at a specified pre-decided date.
Equity shares are mostly identical of what the ordinary shares used to be, even though it has not been mentioned in section 86 of the Act, it has been mentioned in section 86 as part of classification of shares, but there is an indefinite and wide-ranging explanation of equity share capital which is not preference share capital. Equity capital can also be called as the ‘risk capital’ because they are full of risk concern the matter if a business venture fails and they got only the unused rights and gains that other shareholders have not already got.
A rights issue is an issue of rights to purchase new shares, which are issued pro rata to the existing shareholders, Armitage (2007). Rights issues were the dominate form of seasoned equity offers for fund raising in the United Sates and the United Kingdom . However, there has been a swing to other forms of share issues. The US has shifted towards firm commitments, Eckbo and Masulis (1992). In this the underwriter guarantees the sale of the issued stock at the agreed-upon price. The shift in the US occurred in the 1960’s. In the UK there has been a move towards open offers. Open offers are similar to rights issues but investors are unable to sell the stocks that they purchase under the open offer to other parties. The change in the UK occurred much later than the US, with the shift occurring in the 1990’s.
Common stock has no preference in the event of bankruptcy or when receiving dividends, dividend amount varies and in the event of liquidation common shareholders do not have to be paid.
Secondary capital consists of nonpermanent forms of equity, included limited-life, preferred stock and subordinated notes and debentures.
Another terminology is Preferred stock, which varies in comparison to common stock investors are paid dividends consistently.
Consider the validity and effect of the following two clauses in the will of Dan: a) ‘I leave my cottage, at 42 Drumsesk Road, to my friend Gurpreet in full confidence that he will dispose of it in accordance with the instructions given to him during my lifetime’. Just before Dan signed the will, he told Gurpreet that he had left a ‘sum of money’ in the will to Gurpreet which he wanted him to hold for the benefit of Jenny. Gurpreet witnessed the will. Jenny died two days before Dan leaving two children. b) ‘I leave my residuary estate to my brothers Ken and Sam jointly’. A few days before the execution of the will Dan gave Ken a sealed envelope, saying ‘these are some instructions I want you and Sam to carry out when I die’. Ken replied ‘you know you can rely on me – if it’s fine with Sam it’s fine with me’. A year later Sam and Dan were killed in a car accident. The sealed envelope says that Dan wanted his residuary estate to pass to his youngest son Joseph. Advise the executors of Dan’s will.
Current English land law on the co-ownership of interests of land has developed quite a contentious history pertaining to the relationship between the acquisition of rights and the quantification of the shares. In terms of co-ownership, there are huge variances and legal consequences when legal ownership is in one person’s name compared to two. These differences can be seen in various landmark cases which have created precedent and developed refined principles such as Lloyds Bank plc v Rosset and the Stack v Dowden. For the courts, it has often been relatively complex to distinguish between constructive and resulting trusts and to decide on the procedure to be used for the quantification of equitable entitlement once the decision to impute has been established. The quantification of resulting trusts is carefully considered in both, Midland Bank v Cooke and Stack v Snowden. In many co-ownership cases dealing with the acquisition of rights and the quantification of shares, the outcomes aren’t always proportionate. Reasons can include the ambiguities in the identification and changes of common intention and contributions types. In speaking to this issue, Baroness Hale stated in Stack v Dowden that “each case will turn on its own facts” and furthermore elaborated on the conditions for a common intention construct arising. It is furthermore important to critically discuss the repercussions these cases have for the future of co-ownership law to reconcile existing sources of confusion.
It has been generally acknowledged that the doctrine of proprietary estoppel has much in common with common intention constructive trusts, i.e. those that concern the acquisition of an equitable interest in another person’s land. In effect, the general aim is the recognition of real property rights informally created. The similarity between the two doctrines become clear in a variety of cases where the court rely on either of the two doctrines. To show the distinction between the doctrines, this essay will analyse the principles, roots and rationale of both doctrines. With reference to the relevant case law it will be possible to highlight the subtle differences between the doctrines in the cases where there seems to be some overlap. Three key cases where this issue surfaced were the following: Lloyds Bank Plc v. Rosset (1991), Yaxley v. Gotts (1999) and Stack v. Dowden (2007). This essay will describe the relevant judgements in these cases in order to show the differences between the two doctrines.
Prior to the winding-up of an insolvent company, its creditors may individually enforce any measure available to them in order to obtain payment of the debt owed to them by such company. However, upon the opening of the winding-up proceedings these individual actions are replaced by a collective insolvency regime which attempts to ensure the rateable and equitable distribution of the assets of the insolvent company among its creditors. This distribution is known as pari passu distribution.
Equity capital represents money put up and owned by shareholders. This money can be used to fund projects and other opportunities under the auspice of creating greater value. This type of capital is typically the most expensive. In order to attract investors, the firms expected returns must consummate with the associated risk ("Financial leverage and,"). To illustrate this, consider a speculative oil drilling operation, this type of operation would require higher promised returns than say a Wal-Mart in order to attract investors. The two primary forms of equity capital are 1) money invested into the business for an ownership stake (i.e. stock) and 2) retained earnings from past profits used to fund future growth through acquisitions, expansions and product development.
Currently, directors have no prima facie entitlement to be remunerated for their work (Hutton v West Cork Railway Co 1883), but Article 23 of the Companies (Model Articles) Regulations 2008 establishes that it is for directors to decide the lev...
Float Shares in the Market Place – Floating shares can be identified simply as the shares of a public entity that are available for trading in a stock market. An advantage of this source of funds is that the entity gets access to new capital that can be used in developing the business. Although its disadvantage is that the shareholders’ interests may differ from the company’s interest or objective.
AutoEdge is facing crisis since millions of its automobiles has had to be recalled due to product quality issues. Many things should be considered in order to implement a proactive response to rectify the situation. As the research analysis, I have been tasked will helping to rebuild AutoEdge’s reputation as well as to reduce and control operating costs. When making any decision on implementing change within the organization market analysis must look at the market structure of the organization. Market structure is made up of the relationship that exists between buyers, sellers, competition, product differentiation, and ease of entry into and exit from the market. The article “Review of Market Structure” (n.d.) defines market structure as the “microeconomic characteristics of different markets” and include such elements as competition level, high versus low entry barriers, and scale (Review of Market Structure, n.d.) To make the decision the decision to relocate, AutoEdge must analysis and evaluate of market structure. This report will discuss the four different types of market structures: monopoly, oligopoly, monopolistic competition, and pure competition. Additionally, it will outline the type of market structure AutoEdge fits into, how that market structure impacts the level of competition, elasticity of demand, price, and position in the industry.
According to Corporation Act 2001 s124(1), it illustrates that ‘’A company has the legal capacity and powers of an individual both in and outside the jurisdiction” . As it were, company as a legal individual must be freely with all its capital contribution shall embrace liability for its legal actions and obligations of the company’s shareholders is limited to its investment to the company. This ‘separate legal entity’ principle was established in the case of Salomon v Salomon & Co Ltd [1987] as company was held to have conducted the business as a legal person and separate from its members. It demonstrated that the debt of company is belonged to the company but not to the shareholders. Shareholders have only right to participate in managing but not in sharing the company property. Besides ,the Macaura v Northern Assurance Co Ltd [1925] demonstrates that the distinction between the shareholders and company assets. It means that even Mr Macaura owned almost all the shares in the company, he had no insurable interest in the company’s asset. The other recent case is the Lee v Lee’s Air Farming Ltd [1961] which illustrates that the distinct legal entities between employee ad director allows Mr.Lee function in dual capacities. It resulted that the corporation can contract with the controlling member of the corporation.
The capital structure of a firm is the way in which it decides to finance its operations from various funds, comprising debt, such as bonds and outstanding loans, and equity, including stock and retained earnings. In the long term, firms seek to find the optimal debt-equity ratio. This essay will explore the advantages and disadvantages of different capital structure mixes, and consider whether this has any relevance to firm value in theory and in reality.
The 4 market structures in relation to the benefits and costs to the consumer and producer