COMPANY LAW AND BUSINESS ASSOCIATIONS
COMPANY LAW AND BUSINESS ASSOCIATIONS
Shares are securities which companies issue to members of the pubic in order to raise money to finance their operations. Shares are securities because they represent the financial interest which a person has in the share capital of the company. So long as the company is still in business, the financial interest (shares) of a shareholder is protected by law and cannot be taken away except by lawful means such as by court order or by nationalization provided fair and adequate compensation is paid
Section 567 of the companies and Allied Matters Act,(CAMA) 2004 defines a share as:
“The interests in a company’s share capital of a member who is entitled to share in the capital or income of such company
The interest or ownership of a shareholder in a company is therefore limited only to the value of his shares in the company. Those who finance the company are therefore not its owners. They only own the money they contribute to the company by way of buying a share in the company’s share capital. The shareholders of the company collectively are therefore its owners only in a technical sense i.e. they collectively own the company’s share capital with which it finances its operations.
shares in a company is property (intangible property) which is capable of being transferred from one person to another. Thus a person who owns shares in a company may sell it to another person, collect his money and move on while the buyer takes his place as shareholder in the company. Since shares are properties, they could be sold or pledged as security for a loan. Shares have book value and premium value.
The book value is the actual value at which the company issued or sold the shares. This value is usually shown in the company’s memorandum of Association. It is the book value because the company’s book record shows it to be so.
Premium value is the market value of the shares. A share is sold at premium if the market price is higher
Shares are securities which companies issue to members of the pubic in order to raise money to finance their operations. Shares are securities because they represent the financial interest which a person has in the share capital of the company. So long as the company is still in business, the financial interest (shares) of a shareholder is protected by law and cannot be taken away except by lawful means such as by court order or by nationalization provided fair and adequate compensation is paid
Section 567 of the companies and Allied Matters Act,(CAMA) 2004 defines a share as:
“The interests in a company’s share capital of a member who is entitled to share in the capital or income of such company
The interest or ownership of a shareholder in a company is therefore limited only to the value of his shares in the company. Those who finance the company are therefore not its owners. They only own the money they contribute to the company by way of buying a share in the company’s share capital. The shareholders of the company collectively are therefore its owners only in a technical sense i.e. they collectively own the company’s share capital with which it finances its operations.
shares in a company is property (intangible property) which is capable of being transferred from one person to another. Thus a person who owns shares in a company may sell it to another person, collect his money and move on while the buyer takes his place as shareholder in the company. Since shares are properties, they could be sold or pledged as security for a loan. Shares have book value and premium value.
The book value is the actual value at which the company issued or sold the shares. This value is usually shown in the company’s memorandum of Association. It is the book value because the company’s book record shows it to be so.
Premium value is the market value of the shares. A share is sold at premium if the market price is higher