LW English Chapter 16 Questions Capital Maintenance
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Can you please clarify question #4?
Vivi, the allowable use of the Share Premium Account that relates to bonus shares states that ‘the Share Premium may be used to finance the issue of FULLY PAID bonus shares to existing members’
The issuance of PARTLY PAID bonus shares would go against the law which determines that a company cannot impose on its members any additional liability than the members have voluntarily taken upon themselves, If partly paid shares were issuable to those members, then the members would find that, suddenly, they now owe to the company the amount un-credited on these new shares. In question 4, that would involve the members having an increased liability to the company of 5c for every share that they received by way of partly paid bonus
OK?
Share premium reserve can be used to issue bonus shares at full value though it purports a 95% issue on a pounds issue.
Hi,
Please could anyone clarify Question Number 4.
Shares cannot be issued at discount value.
could anyone clarify the question no 4?
hi
as i understood , share premium account reserves can be used to finance bonus share issue.
but that answer is wrong.
could you please clarify