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Chapter

Cover Company Law

13. Specific conflicts—CA 2006, Part 10, Ch 4, and Ch 4A  

This chapter considers provisions of the Companies Act 2006 (CA 2006), Pt 10, Ch 4, and Ch 4A. These provisions regulate transactions with directors where there is an acute conflict of interest between the director’s personal interests and his duty to the company and so, typically, the statute requires prior shareholder approval of the transaction. The relevant provisions address: directors’ service contracts (CA 2006, ss 188–189); payments for loss of office (CA 2006, ss 215–221); for quoted companies (which must have a directors’ remuneration policy)—remuneration payments and payments for loss of office (Ch 4A); substantial property transactions (CA 2006, ss 190–196); and loans and similar financial transactions (CA 2006, ss 197–214).

Chapter

Cover Company Law

21. Share capital—capital raising and payment  

This chapter considers the statutory rules governing share capital requirements, especially the rules governing allotment of shares, payment for shares, and capital raising. Share capital rules are predominantly statutory and this chapter looks at the statutory framework on allotment including the authority of the directors to allot shares, the need for rights issues; the ability to accept a non-cash consideration; and the prohibitions on various types of consideration, in the case of public companies. Minimum capital requirements and the need to avoid issuing at a discount are considered. A key issue for public companies is whether to make an offer of their shares to the public or seek to have their shares traded on a public market. The regulatory framework for public offers of shares, essentially requiring a prospectus, is considered.