TUTORIALS

QUESTIONS

TOPIC: SHARES

1. The provisions of company law are designed to

ensure that a company does not issue share at a
discount and maintains share capital thereafter are
designed to protect the creditors of the company.
Creditors would be better protected by a requirement
that a company must have a minimum share capital
which has been fully paid up in cash. Discuss.
2. Does a reduction of dividend attach to preference
shares amount to a variation of class rights?

3. It is a fundamental rule of company law that a

company cannot provide financial assistance to a
purchaser of the company own shares. Discuss.
4. Discuss the relationship between redemption and
reduction of shares. Are there any similarities and
differences in the process of redemption and
reduction of shares?
5. Describe the relationship between variation of class
rights and reduction of share capital. What are the

similarities and differences in terms of process of

such transactions?
6. Reduction of capital can amount to a variation of
class right. Discuss.
7. What are the effects of variation of class rights,
redemption of preferential shares and reduction of
share and share buy backs?