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Share Capital Notes

Law Notes > Corporations Law Notes

This is an extract of our Share Capital document, which we sell as part of our Corporations Law Notes collection written by the top tier of Monash University students.

The following is a more accessble plain text extract of the PDF sample above, taken from our Corporations Law Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

Topic 5: Share Capital, Loan Capital and Dividends

1. Share Capital a. Description: i. A share is an item of intangible property also known as a "chose in action" and is a
proportionate interest in the net worth (A­L) of the business
ii. Ownership of a share gives the shareholder proprietary rights under the CC and the law
and the law recognises that ownership of shares is capable of being divided into legal
and equitable interests 1070A (however shareholder do not have legal or equitable
interest in the assets of the company) iii. Capital is the total amount of assets available to a business to use in its activities iv. A company may issues shares for any amount it chooses b. A company has the power to issue shares 124(1)(a) which includes the power to issue
245A i. Bonus shares 254A(1)(a) ii. Preference shares 254(1)(b) iii. Partly paid shares 254A(1)(c)

you are liable to pay calls on your shares unless the company is a no liability
company 254M

a shareholder need not contribute more than the amount unpaid on their shares

a company may give security over its uncalled capital 124(1)(e)

a company's shareholders may pass a special resolution that has the effect of
restricting the company's right to make calls to situations where the company
has become insolvent 254N

c. Rights that attach to shares i. To participate in financial distributions of the company, generally:

Entitlement to dividends

Right in winding up of company to be repaid proportionate share of
capital/receive shares of any surplus assets

ii. to participate in the governance of the company:

right to receive notice of meetings

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