Company Law 1 - University of Wolverhampton

ii Would your answer differ if the preference shares were noncumulative?d What provisions are found in the Companies Act 1985 in respect ofthe payment by the directors of a dividend out of a company’scapital?(Wolverhampton LLB by Distance Learning, September 2000, Question 1.)2 a What procedures must be followed by a company if it wishes to:i reduce its capital; andii issue shares at a premium.b Albert has been invited to join the board of directors of Primo Ltd. The company’s articles of associationrequire each director to hold 2,000 qualification shares. As Albert does not have themoney to purchase the shares, the company is willing to loan him the money.i What procedures should be followed to effect the loan?ii What action (if any) may be taken against the company by a shareholder who disapproves of theloan?c Simon (who cannot now be traced) stole Bertrand’s share certificate for 500 shares in Primo Ltd.Simon then sold the shares to Charles and forged Bertrand’s name on the share transfer form.Charles duly sent the share certificate and share transfer form to Primo Ltd. The company secretaryof Primo Ltd duly wrote to Bertrand asking him whether he had any objection to the transfer toCharles being effected. Bertrand did not bother to reply to thisletter.Charles subsequently sold the shares to Dawn in whose name the shares are now registered.Advise Bertrand:i as to his entitlement to the shares;ii as to where any loss occasioned by the events must fall.(Wolverhampton LLB by Distance Learning, September 2001, Question 1.)