Shares accn2
- Created by: Lucysalisbury
- Created on: 24-04-16 15:39
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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.
- BUT they offer a return of dividends paid and capital gained.
- 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.
- The amount of share capital relating to shareholders who OWN the company.
- 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 amount of share capital relating to preference shareholders who are NOT owners.
- Ordinary share capital
- 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
- Limited Liability
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