ICAEW BL · Chapter 9 · Question 1 of 10
Fairlight Ltd wants to raise money quickly by issuing £1 ordinary shares at 80p each. Is this permitted?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) No, because shares may not be allotted at a discount to their nominal value
Explanation
Under s580 Companies Act 2006, a company's shares must not be allotted at a discount to their nominal value. If they are, the allottee must pay the company the amount of the discount plus interest. Shares may be issued at a premium, but not below nominal value, whatever the company type or resolution.
More Share capital, loan capital and capital maintenance MCQs
- Q3Corrie Ltd issues 40,000 ordinary shares with a nominal value of 25p each at a price of £1.40 per share, fully paid in cash. What amount…
- Q4Penrose Ltd, a private company, has the following figures: accumulated realised profits brought forward £120,000; realised profit for the…
- Q5Ashcombe plc, a public company, has called-up share capital of £400,000, a share premium account of £100,000 and retained earnings of…
- Q6Thornbury Ltd grants a fixed charge over its warehouse to a lender. The lender's solicitor forgets to deliver the charge for registration…
- Q7Brackley Ltd's debenture describes a charge over its present and future book debts as a 'fixed charge'. However, Brackley Ltd is free to…