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In the context of share capital, which of the following may a company undertake to do freely without restriction?
Extinguish or reduce liability on partly paid shares
Cancel paid-up share capital which has been lost or which is no longer represented by available assets
Cancel unissued shares
Pay off part of paid-up share capital out of surplus assetskindly help me with this question the answer is statement 1
i am still confused how and is it wrong or right
thank you i will be helpfulI don’t agree with your choice. Where shares are in issue and are only partly paid, the act of cancellation of the unpaid element is taking away from the payables of the company the security of some liquidator of the company in the future from being able to call up the unpaid amounts of those partly paid shares and thus depriving the liquidator of the ability to swell the company’s funds.
You’ll need to think again and this time, when you have selected your answer, justify your choice to me.
OK?
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