Debenture
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Section 43
- debt instrument defined in s 43: including any security other than the
shares of a company, whether issued i.t.o a security document or not, but
excluding promissory notes and loans
- debenture can take many forms, at its most basic form is a document
issued by a company acknowledging that it is indebted to the debenture
holder in the amount stated therein
- may be secured or unsecured
- the negotiable instrument is not a debenture or vice versa
- debenture holder or holder of a debt instrument is a creditor of the
company
- such debt instruments may carry with them the right to attend and vote at
general meetings and to appoint directors, as well as special privileges
regarding the allotment of securities unless MOI provides otherwise
, What are public offerings?
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-companies may raise cash for their businesses by offering securities to the
public⇨ company law regulates this process closely to avoid abuse
- offer of securities to the public must be accompanied by a prospectus,
the contents of which are prescribed
- a prospectus: an invitation to the public inviting members of the public to
invest in a company and provide the prospective investor with information
on which to make an informed decision.
What types of preference shares are used?
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Section 37
- class of shares whose holders enjoy preference over any other class of
shares w.r.t. payment of dividends and sometimes to return of capital on
winding up
- usually carry only a modest income return and even if MOI provides that
preference shareholders do not have the right to vote, the Companies Act
provides that they have an irrevocable right to vote on any proposal to
amend the preferences, rights, limitations and other terms associated with
their shares.
- the company can't have preference shares unless it also has ordinary
shares or some other class
- as a general rule of construction, preference shares do not, on a winding-
up, enjoy a right to repayment of their capital in priority to ordinary
shareholders
In what circumstances will the holder of non-voting shares have the right to vote?
Give this one a try later!
Section 43
- debt instrument defined in s 43: including any security other than the
shares of a company, whether issued i.t.o a security document or not, but
excluding promissory notes and loans
- debenture can take many forms, at its most basic form is a document
issued by a company acknowledging that it is indebted to the debenture
holder in the amount stated therein
- may be secured or unsecured
- the negotiable instrument is not a debenture or vice versa
- debenture holder or holder of a debt instrument is a creditor of the
company
- such debt instruments may carry with them the right to attend and vote at
general meetings and to appoint directors, as well as special privileges
regarding the allotment of securities unless MOI provides otherwise
, What are public offerings?
Give this one a try later!
-companies may raise cash for their businesses by offering securities to the
public⇨ company law regulates this process closely to avoid abuse
- offer of securities to the public must be accompanied by a prospectus,
the contents of which are prescribed
- a prospectus: an invitation to the public inviting members of the public to
invest in a company and provide the prospective investor with information
on which to make an informed decision.
What types of preference shares are used?
Give this one a try later!
Section 37
- class of shares whose holders enjoy preference over any other class of
shares w.r.t. payment of dividends and sometimes to return of capital on
winding up
- usually carry only a modest income return and even if MOI provides that
preference shareholders do not have the right to vote, the Companies Act
provides that they have an irrevocable right to vote on any proposal to
amend the preferences, rights, limitations and other terms associated with
their shares.
- the company can't have preference shares unless it also has ordinary
shares or some other class
- as a general rule of construction, preference shares do not, on a winding-
up, enjoy a right to repayment of their capital in priority to ordinary
shareholders
In what circumstances will the holder of non-voting shares have the right to vote?
