Maintenance of capital - raising of capital, Business Law and Ethics

Maintenance Of Capital:

The issued share capital of a company limited by shares is the primary security for the company's creditors. In Re: Exchange Banking Co (Flitcroft's Case) Jessel, M.R. stated: "A limited company by its memorandum of association declares that its capital is to be applied for the purpose of the business. Therefore it cannot reduce its capital except in the manner and with the safeguards provided by statute... One reason is this-there is a statement that the capital shall be applied for the purposes of the business, and on the faith of that statement, that is sometimes said to be an implied contract with creditors, people dealing with the company give it credit. The creditor has no debtor but which impalpable thing the corporation that has no property except the assets of the business. The creditor, Hence I may say that gives credit to that capital and gives credit to the company on the faith of the representation that the capital shall be applied only for the purposes of the business also..."

Posted Date: 1/12/2013 3:16:46 AM | Location : United States







Related Discussions:- Maintenance of capital - raising of capital, Assignment Help, Ask Question on Maintenance of capital - raising of capital, Get Answer, Expert's Help, Maintenance of capital - raising of capital Discussions

Write discussion on Maintenance of capital - raising of capital
Your posts are moderated
Related Questions
Contractual Capacity of Persons of Unsound Mind Furthermore a contract entered into through a person of unsound mind is voidable on his option whether it is proved that the ot

Termination - Duties of Owner Although below S.12 of the Act the hirer may on any time before the final payment may or instalment falls due to terminate the agreement through li

State Article 14 of air and outer space law Article 14 refers to the fact that each contracting State should agree to take effective measures to prevent the spread by means of

Question: a) The first pillar of Basel II provides a range of options for determining the capital requirements for credit risk and operational risk to allow banks and supervi

Directors' Remuneration: For technical reasons the directors are not regarded as servants or employees of the company of that they are directors. Therefore  here they have no

Calls On Contributories:                                       Every person who is a member of the company at the commencement of winding up and every past member is in princi

In a business context, there are thousands of legal claims that happen frequently in a company's course of operations. Frequently, the management team must come to together to veri

QUESTION The Web has made it extremely attractive to conduct commercial activities online. Companies such as Amazon.com and eBay are e-commerce powerhouses that sell all sorts

International Peace and security Pacific settlement of disputes means to resolve disputes to avoid threats to International Peace and security so that such disputes do not beco

Explain Law making treaties Law making treaties are those treaties which come into existence because of lack of customary laws related to a particular issue and in order to mak