LAW 3212:COMPANY LAW SHARE CAPITAL

MUHAMMAD FAIZ 0928055 NOVAN ANSHORY 0733831

WHAT IS SHARE?
Share is a fractional part of capital in a company. In company business, the capital consists of shares.

SHARE CAPITAL
Is the money of a company to do business.

CLASSIFICATION OF CAPITAL
Nominal or authorized capital Issued capital allotted capital Paid up capital Unpaid up capital Called up capital Uncalled up capital Reserved capital

CLASSIFICATION OF SHARES
Preferences shares Ordinary shares Premium shares Discount shares

Class Right
Class rights of preference shareholders: A fixed rate of dividend in every year A priority right of payment dividend over the ordinary shareholders A priority right of repayment of capital Can appoint directors to represent the class Class rights of ordinary shareholders : Right to vote in the general meeting to make resolutions Rigth to participate in the distribution of surplus profit of the company after it has wound up Can appoint directors to represent the class

Variation of Class Rights

To modify or abrogate a particular right given to share, for ex :
To cancel the rigth to get fixed rate dividen in every year by the preference share To issue share with equal ranking with the existing shareholder

Procedure of Variation of The Class

Section 31 (1) and Article 4 of Table A of Fourth Schedule of Companies Act 1965 The Class Right can be varied if variations voted by three fourths of the members Section 65 (1), Protection against variation

Restriction on Purchase of Shares in The Company

Section 67 (1) A company must not give any financial assistance for the purpose of .. a purchase by any person. of any share in the company or where the company is a subsidiary, in its holding company.

Reduction of Capital
Under English common law reduction of capital is not allowed Section 64 of the Companies Act ( Malaysia) allow it Company can reduces its share capital if it has excess capital which is not needed

Procedure of Reduction of Capital

1. The articles of the company must allo the reduction of capital. 2. Special resolution in general meeting to reduce the capital 3. High Court approval 4. The company amend its memorandum to reduce the capital Objection to reduction of share capital by creditors if the company cannot pay the creditors if capital returns