Shares accn2

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  • ACCN2 Shares
    • Limited Liability
      • This refers to the business and it's owners being considered as separate legal entities.
      • The assets or liabilities of one are separate from those of the other.
      • Investors only loose what they invest... personal belongings are not affected.
    • Shares
      • A share is a document representing part ownership of a company.
      • Shares carry risk
        • BUT they offer a return of dividends paid and capital gained.
          • Capital gained because the more money invested.. the larger the business will grow and expand.
      • Each share is a title of ownership for shareholders.
    • What are the rights shareholders have?
      • A right to share in any declared dividend.
      • Attendance and voting rights in AGM.
      • They have the right for the companies assets if company is wound up.
      • They DONT have the right to intervene in the management. They are NOT managers.
      • Share capial
        • The money raised by issuing shares to people who then become shareholders.
        • Authorised share capital
          • Maximum value of shares that can be issued.
        • Issued share capital
          • Actual amount issued.. it cant be greater than authorised
    • Two main types of share
      • Ordinary share capital
        • The amount of share capital relating to shareholders who OWN the company.
          • The shareholders are entitled to ordinary dividends.
      • Preference share capital
        • The amount of share capital relating to preference shareholders who are NOT owners.
          • Shareholders are entitled to a fixed dividend
        • Can either be cumulative or non cumulative.
          • Cumulative: Any shortfall in dividend is made good in a next year
          • Non Cumulative: Any shortfall in dividend is effectively lost.
    • The value of shares
      • Nominal value: The value at which shares are denominated. The face value of shares.
      • Market value: The value the shares will fetch on the market. May differ from N.V


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