May shares be issued at a premium and may they be issued at a discount?

Subject to certain conditions, shares may be issued at a premium, but they may not be issued at a discount. However, a company may pay a commission of up to 10 per cent or the amount authorised by the articles (whichever is the less) in consideration for a person subscribing or procuring subscriptions for its shares.

What must happen in the event of a serious loss of capital by a public company?

There is a special requirement when the net assets of a public company fall to half or less of the company's called-up share capital. The directors must convene an extraordinary general meeting and they must do so within 28 days of any director becoming aware of the situation. The meeting must be called for a date not more than 56 days after a director became aware of the situation. The requirement only applies to public companies. There are no requirements concerning what, if anything, must be done at the meeting, and there are no requirements that directors make proposals to the meeting.

In what circumstances may shares be forfeited or surrendered?

Forfeiture of shares may be the ultimate sanction if a shareholder repeatedly fails to pay calls or installments. It is only possible if it is permitted by the articles and the detailed provisions of the articles must be strictly followed. Table A does provide for the forfeiture of shares, as do the new model articles for public companies. Surrender occurs if a member voluntarily surrenders his shares and the directors accept the surrender. The directors can then deal with the shares as if they had been forfeited. Despite forfeiture the member (or former member) remains prima facie liable to pay sums outstanding on the shares at the time of forfeiture. There are special requirements concerning the forfeiture or surrender of shares in public companies.

Is interest payable if calls are paid late?

It is if the articles permit it. It is permitted by Table A and also by the new model articles for public companies.

Can stock be converted into shares?

The term 'stocks and shares' is part of the English language, but there are now virtually no practical advantages in having stock rather than shares and stock is rarely encountered. So long as the articles permit, stock can be converted into paid-up shares by means of an ordinary resolution. It is no longer possible to convert shares into stock.

Can a minor own shares in his own name?

Yes, but it is probably not a good idea. A minor may be a member of a company, but he may repudiate membership and the obligations of membership at any time before his eighteenth birthday or very soon afterwards. Such obligations may include the requirement to pay a call on his shares. If he has not repudiated membership by his eighteenth birthday or soon afterwards, he will assume the full obligations of his ownership. Although a minor may be a member of a company, there is no obligation on a company to accept a minor as a member. In practice, most companies do not accept a minor as a member, although there are no problems with a nominee holding with a minor as the beneficial owner.

It sometimes happens that a minor becomes a member without the company being aware of the fact. In these circumstances the company may act if and when the true position becomes known, and it may do so at any time before the minor reaches his eighteenth birthday. The company may remove the minor's name from the register of members and restore the name of the person from whom he acquired the shares.

If the company registers a minor as a member whilst knowing that he is a minor, it cannot afterwards repudiate the decision. A minor who is properly registered as a member may exercise rights of membership, including receipt of dividends. Subject to any restrictions in the articles, a minor may vote at meetings. A company should not accept a transfer of shares purported to be made by a person known to be a minor.

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