F4ENG Chapter 16 Questions
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I am confused with the 4th question. Wouldn’t it rather be “is an allowable use”?
Thanks!
D isn’t an allowable use because the share premium is used to finance the issue of ONLY FULLY PAID shares of which D isn’t (95 pence instead of £1)
No, the question is correctly phrased and the identified answer is correct
Hi Mike, I am having trouble understand why “the reserve liability” is payable by the members.
My understanding: shares issued by company are paid by the shareholders, therefore, any unpaid portion should be a liability of shareholders (who purchased the share issued by company).
Members of the company are not necessary the shareholder of the company — then why they are liable for this?
Many thanks for your help as always.
But you could eliminate the other three from being the possible correct answer already.
Member of the company means shareholders.
A ‘member’ is a person whose name appears in the register of members of a company and, upon becoming a member, that person accepts the liabilities, rights and duties associated with the position of ‘member’
Those duties include the acceptance of the liability to pay amounts of unpaid capital as and when the directors choose to make a call on the members for those unpaid amounts
OK?