Nghiêm khánh linh 42k06 5 CHAPTER 2

CHAPTER - SHARES Name: Nghiêm Khánh Linh TRUE/FALSE T F F T T COMPLETION The terms and conditions of a prospectus should include the issue price and the call-up amount of shares being issued When the allotment of shares is made and refunds are given, the company can then transfer the application money from the bank trust account – share (asset) to its bank account When the application moneys are received from the prospective shareholders, they are deposited in the bank trust account When the number of shares applied for by the applicants exceeds the number of shares on offer, this is referred to as an oversubcribed Oversubscription moneys received from the applicants are refunded from the shareholder receivable_Application account When the allotment monies are received from the shareholders, the bank account is debited and the shareholder receivable_Application account is credited MULTIPLE CHOICE C B A A C C SHORT ANSWER When a company issues share, factors would the directors of a company take into account when determining the terms and conditions of share issue: - Maximization of shareholder wealth - The effect on the market price of existing shares - The volume of shares to be offered - The expectation of future profits and dividends to service the new shares The difference between a ‘private placement’ and public offer: Private placement Public offer Without using the mass media or the Via the mass media, including the internet internet An arrangement for offering securities to An offer for sale of securities to one no more than one hundred (100) hundred (100) or more investors excluding investors excluding institutional institutional securities investors; securities investors An offer for sale to a number of undefined investors The terms and conditions that should be included in a prospectus: - Summary of issuer information including size of management organization, business operations, assets and financial situation, board of directors or board of members or owner of the company , director or general director, deputy - director or deputy general director and shareholding structure (if any); Information about the offer and the preferred subject securities, including the terms of the offer, risk factors, profit proposal and dividend plan for the following year after issuance securities, issuance plans, and plans for using the - proceeds of the offering Financial statements as stipulated in article 16 of this Law of the issuing - organization for the last two years; Other information as stipulated in the sample form for a prospectus A prospectus is an invitation to investors to make an offer for shares (‘invitation to treat’) 4 Shares issued payable by installments is a share in a company which has only partial been paid compared to the par value, with the understanding that as the company requires more funds, calls will be made from time to time until the shares are fully paid, when no further calls can be made The amounts may be specified in the prospectus or unspecified and the shareholder is liable when a call is made by the company until the shares are fully paid - Issue price: Total amount to be paid for the share - Called-up amount: Cumulative amount of installments payable (includes payable but unpaid amounts) - Paid-up amount: The amount actually paid (excludes calls that have not been paid) Undersubscription of a share issue is that applications received are less than the shares offered - Shares can still be allotted, provided minimum subscription condition (if there - is one) is met If minimum subscription not achieved after the disclosure document is issued, share issue must be abandoned Circumstances can a company retain excess application monies when applications is alloted fewer shares than applied The accounting procedure for dealing with retained excess monies apply them to allotment of futhure calls