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Non Cash Consideration for Shares….

Forums › ACCA Forums › ACCA LW Corporate and Business Law Forums › Non Cash Consideration for Shares….

  • This topic has 2 replies, 3 voices, and was last updated 14 years ago by MikeLittle.
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  • April 17, 2011 at 12:46 pm #48124
    willynwilson
    Member
    • Topics: 12
    • Replies: 29
    • ☆

    As public companies can accept non cash consideration, as long as they are valued at nominal value,

    what happens if the non cash consideration exceeds the nominal value?

    cash consideration would be credited to the share premium, so would the company have to credit share premium with non cash consideration?

    April 17, 2011 at 10:30 pm #80898
    neilsolaris
    Member
    • Topics: 59
    • Replies: 415
    • ☆☆☆

    I did some googling and came across this site.

    https://www.proeconomics.com/law/company/share__premiums_and__non_cash_consideration.html

    It seems as though the excess goes into a share premium account, the same as would happen with cash consideration. But that’s assuming I understood it right.

    April 21, 2011 at 6:47 pm #80901
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    Quote from the Companies Act: “When shares are issued, whether for cash or otherwise, for an amount in excess of their nominal value, an amount equal to that excess shall be credited to the Share Premium Account”

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