In relation to company law explain the meaning of the following: (a) ordinary shares. (3 marks) (b) preference shares. (3 marks) (c) debentures. (4 marks)   【答案】 (a) Ordinary shares As defined in Borland’s Trustees v Steel (1901) a share: ‘…is the interest of a shareholder in the company measured by a sum of money, for the purpose of liability in the first place, and of interest in the second…’ The nominal value of the shares held represents the maximum liability of a shareholder in a limited liability company. However, the actual liability of a shareholder is the amount remaining unpaid on any shares held. This difference arises in the following circumstances. When companies issue shares they may not require the full nominal value of the shares to be paid at once. This allows the company the possibility of raising further capital from its members as it becomes necessary in the future. The amount already paid to the company is referred to as called-up capital. Any uncalled capital represents the amount of potential liability. If the shares are fully paid up then the shareholder has no further liability towards meeting the company’s debts. In regard to return, shares enjoy an advantage of other securities. If the company is profitable, not only will they enjoy dividend payments but the market value of their shares will go up. On the other hand if the company does not do well, they may well not receive any payment and the value of their shares will diminish. (b) Preference shares represent a more secure form of investment than the ordinary share. The reason for this is that preference shares receive a fixed rate of dividend before any payment is made to the ordinary shareholders and usually they enjoy priority over ordinary shares with regard to repayment of capital. The actual rights enjoyed by the preference will be stated in the company’s articles of association. Dividend rights in relation to preference shares are usually cumulative, which means that a failure to pay the dividend in one year has to be made good in subsequent years. Although, as with ordinary shares, the holders of preference shares are members of the company, their voting rights are restricted to any period when their dividends are in arrears. (c) Debentures are documents that acknowledge a company’s borrowing, although the term has been extended to cover the loan itself. As debenture holders lend money to the company they are its creditors, they are not members. As creditors they are entitled to receive interest, whether the company is profitable or not. It may even be necessary to use the company’s capital to pay the debenture interest. Share dividends on the other hand must never be paid from capital. It is usual for the company to provide security for the amount it has borrowed by issuing debentures. There are two methods of securing debentures: by means of a floating charge, or by means of a fixed charge, both of which have to be properly registered. In the case of a floating charge the security is provided by all of the company’s property, some of which may be continuously changing, such as stock-in-trade. The charge only crystallises, i.e. fixes on the specific property, when the company commits some act of default, and until then it is free to deal with the property in its ordinary course of business. The disadvantage of floating charges are that they come after fixed charges when it comes to paying a company’s debts, so if all the assets are used to pay off those prior debts, there may well be nothing left to pay the holders of the floating charges.    ACCA特许公认会计师F段+OBU本科学位班【签约班】                  高级商业会计证书+英国牛津布鲁克斯大学学士学位 不过重读1年                查看折扣  ACCA特许公认会计师P段【签约班】                                         名师授课，签约过

with the storage liquid, which had seeped through minute cracks in the phials. It was held that there was no breach of duty, since the doctor who administered the injection had no way of detecting the contamination at that time.    ACCA特许公认会计师F段+OBU本科学位班【签约班】                  高级商业会计证书+英国牛津布鲁克斯大学学士学位 不过重读1年

as against the price that Astride will have to pay someone else to get the work done: i.e. £500.    ACCA特许公认会计师F段+OBU本科学位班【签约班】                  高级商业会计证书+英国牛津布鲁克斯大学学士学位 不过重读1年                查看折扣  ACCA特许公认会计师P段【签约班】                                         名师授课，签约过关有保障！不过免费重读1年

members who would be entitled to vote on the circulation date of the resolution. The company’s auditor should also receive such documentation (s.502 CA 2006).  ACCA特许公认会计师F段+OBU本科学位班【签约班】                  高级商业会计证书+英国牛津布鲁克斯大学学士学位 不过重读1年                查看折扣  ACCA特许公认会计师P段【签约班

ounting records. ABC needs a new set of accounting records, this is often not immediately available and therefore resistance to change is common. The setting up of new cost pools is needed which is time consuming. (c) Cost per unit calculation using machine hours for overhead absorption    ACCA特许公认会计师F段+OBU本科学位班

calculated. The learning rate is calculated by measuring the reduction in the average time per kitchen as cumulative production doubles (in this case from 1 to 2). The learning rate is therefore 22·80/24·00 or 95%    ACCA特许公认会计师F段+OBU本科学位班【签约班】                  高级商业会计证书+英国牛津布鲁克斯大学学士学位 不过重读1年

In relation to a company’s shares, explain the following: (a) the statement of capital and initial shareholdings; (4 marks) (b) authorised minimum issued capital in a public company; (2 marks) (c) paid-up capital; (2 marks) (d) the difference between nominal value and market value. (2 marks) 【答案】 The word ‘capital’ is used in a number of different ways in relation to shares. (a) Under the provisions of the Companies Act (CA) 1985 the memorandum of a limited company with a share capital was required to state the amount of the share capital with which the company proposed to be registered and the nominal amount of each of its shares. This was known as the ‘authorised share capital’ and set a limit on the amount of capital which the company could issue, subject to increase by ordinary resolution. Section 9 of the CA 2006 removes the concept of ‘authorised capital’ and replaces it with the requirement to submit a ‘statement of capital and initial shareholdings’ to the registrar in the application to register the company. The statement of capital and initial shareholdings is essentially a ‘snapshot’ of a company's share capital at the point of registration. Section 10 CA 2006 requires the statement of capital and initial shareholdings to contain the following information: – the total number of shares of the company to be taken on formation by the subscribers to the memorandum; – the aggregate nominal value of those shares; – for each class of shares: prescribed particulars of the rights attached to those shares, the total number of shares of that class and the aggregate nominal value of shares of that class; and – the amount to be paid up and the amount (if any) to be unpaid on each share (whether on account of the nominal value of the shares or by way of premium). The statement must contain such information as may be required to identify the subscribers to the memorandum of association. With regard to such subscribers it must state: – the number, nominal value (of each share) and class of shares to be taken by them on formation; and – the amount to be paid up and the amount (if any) to be unpaid on each share. Where a subscriber takes shares of more than one class of share, the above information is required for each class. (b) Issued capital represents the nominal value of the shares actually issued by the company and public companies must have a minimum issued capital of £50,000 or the prescribed euro equivalent (s.763 CA 2006). (c) Paid-up capital. This is the proportion of the nominal value of the issued capital actually paid by the shareholder (s.547 CA 2006). It may be the full nominal value, in which case it fulfils the shareholder’s responsibility to outsiders; or it can be a mere part payment, in which case the company has an outstanding claim against the shareholder. Shares in public companies must be paid up to the extent of at least a quarter of their nominal value (s.586 CA 2006). (d) Once established, the nominal value of the share remains fixed and does not normally change. However, the value of the shares in the stock market may be subject to daily fluctuation depending on a number of interrelated factors, such as the profitability of the company, the prevailing rate of interest or prospective takeover bids. Thus the market value of a share of £1 nominal value may as much as £5 or higher, or as low as 1 penny  ACCA特许公认会计师F段+OBU本科学位班【签约班】                  高级商业会计证书+英国牛津布鲁克斯大学学士学位 不过重读1年                查看折扣  ACCA特许公认会计师P段【签约班】                                         名师授课，签约过

In relation to the Companies Act, 2006, explain the duty of directors to promote the succ

In relation to the law of contract, explain what is meant by breach of contract, paying attention to anticipatory breach. (10 marks) 【答案】 Breach of contract occ

that any dividend was paid from capital, shall be liable to repay any such money received to the company.    ACCA特许公认会计师F段+OBU本科学位班【签约班】                  高级商业会计证书+英国牛津布鲁克斯大学学士学位 不过重读1年                查看折扣  ACCA特许公认会计师P段【签约班】                                         名师授课，签约过关有保障！不过免费重读1年