Company Law 1 - University of Wolverhampton

Study Unit 7 Suggested minimum study hours: 10TopicSharesThis Unit covers material contained in the Learning Project.IntroductionShare capital is the proprietors’ contribution to, and stake in, the company. We shall consider therules and regulations which govern the issuing, purchasing and transfer of company shares.Objectivesa Read and consider the cases which consider the nature of shares anddebentures. Are there any clear definitions of either?b Consider the relative advantages and disadvantages of the various types of company securityavailable to an investor. Do these advantages and disadvantages vary according to the financialfortunes of the company?c Consider the provisions of ss263–281 CA 1985 and how these have altered the common lawrules on the payment of dividends.d Note the different rules now applied to payment of dividends by public and private companiesrespectively. Compare and contrast these provisions.e Consider the purpose of the share certificate in modern company law and (i) the doctrine of estoppelby share certificate and (ii) the effect of a forged share certificate.f Look at the decisions on restrictions on the transferability of shares. Are these important today inthe case of (i) public companies or (ii) private companies?g Consider the procedure for the transfer of shares in the case of publicly quoted companies.Essential ReadingThese titles have been supplied as part of your study materials.Company Law by John Lowry and Alan Dignam OUP 2006Statutes on Company Law 2007-2008Cases and Materials on Company Law (Andrew Hicks and S Goo)General ReadingThese titles have not been supplied and are not essential reading, but you may wish to refer tothem to further your understanding. Gower and Davies: the Principles of Modern Company Law,Davies –Relevant Chapter(s)Case law and statuteSHARES – CLASSIFICATIONBirch v Cropper (1889) 14 App Cas 525Borland’s Trustee v Steel Brothers & Co Ltd [1901] 1 Ch 279Carruth v Imperial Chemical Industries Ltd [1937] AC 707Chatterley-Whitfield Collieries Ltd, Re [1949] AC 512 (HL)