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Which of the following statements regarding ordinary share capital is correct?
a) Dividends must be paid on ordinary share capital every financial year.
b) On liquidation of the company, ordinary shares entitle the shareholder to have their capital repaid ahead of other creditors.
c) Ordinary shares may or may not have voting rights attached.
Hello sir!
Please help me in this question. The answer is C but they are saying in option C that ordinary shares MAY NOT have voting rights attached. I have never study anywhere that ordinary shareholders may not have voting rights I always study they have.
Please explain this please!!!Hi Yousha
I think that you may possibly be misinterpreting a word within the question and within the answer
These sentences say that ‘Ordinary shares … may not have voting rights’ and I believe that you have possibly misinterpreted this as ‘Ordinary shares are NOT ALLOWED to have voting rights’
It’s an ideosyncracyof the English language that the use of the word ‘may’ and the words ‘may not’ can be interpreted as being either allowing or forbidding.
Did your father never say to you ‘You may not do something-or-other’?
In the question above, the interpretation should be that ‘ordinary shares do sometimes carry voting rights and sometimes they do not’
Is that better?
No sir I’m not misinterpreting, I copy the question as it is written in BPP kit. You can also check it in BPP kit, question number is 18.2 and if you allow I can E-mail you picture of question and answer.
Trust me!!!Hi Yousha
Now you really have misinterpreted … me
I was not for one minute suggesting that you had mis-read nor mis-typed your post
My comment was about the strangeness of the English language
I’m learning a foreign language (started at the start of lockdown) and one of the sentences that I have to translate into English is …
‘I’m not leaving because of you’
Now that could mean that, because of your presence, I intend to stay here’ or it could mean that I’m leaving
, but only because that’s what I want to do and it’s not an action that you have caused’Now, to get back to your post, the question suggests that ordinary share capital may not have voting rights. That COULD be interpreted as ‘Ordinary share capital is not allowed to have voting rights’ or … it COULD mean that ‘it is possible for there to be ordinary shares that don’t have voting rights’
Clearly, as you know, it is typically the case that ordinary shares DO have voting rights … but it IS possible for there to be ordinary shares that DO NOT have voting rights
To use the word ‘may’ in my answer …
… it may be that there are ordinary shares in issue that do have voting rights but …
… it is equally possible that there may be ordinary shares in issue that do not have voting rights
As a matter of practicalities, it would be most unusual for there to be ordinary shares in issue that do not have voting rights …. but it is possible
Is that better for you?
Thank you so much sir!!
Now I understood your explanation.
And yeah my English is not better enough but this language is use by BPP exam kit.Without wishing to worry you, the ACCA examiners do sometimes (thankfully rarely) use expressions that are not easily understood by non-natural English speaking students
It seems to me that the incidence of ‘difficult’ English words is decreasing so it shouldn’t be a major problem for most
Besides, from what little I’ve read of yours, your English is comfortably strong enough to approach these exams with confidence
OK?
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