Shares s1070a nature of shares and certain other

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Shares S1070A: Nature of shares and certain other interests in a company or registered scheme - Shares are “personal property” - Shares are intangible personal property (distinguish tangible); a share is therefore classed as a “chose in action” (distinguish “chose in possession”: tangible) - As property, shares can be transferred, used as security, bequeathed by will S140: Effect of constitution and replaceable rules - Rights of ordinary shareholders include: voting, sharing profits by receiving any dividends and sharing any surplus on winding up Rights of holders of preference shares - Defined as having additional rights – classically as to income, or as to capital, or as to both Debentures Equity Capital: Shares (Investors are insiders = shareholders) Debt Capital: Debentures (Investors are outsiders = creditors) Debentures are essentially debt securities. Namely, it is a document issued by a company that evidences debt, which may be secured or unsecured Lecture 8: Fundraising and Disclosure; Maintenance of Capital A. Fundraising and disclosure Introduction Under s706 of the Corps Act, offer of securities for issue needs to disclosure to investors unless s708 or s708AA says otherwise. Security as defined in s761A as: Share in a body, a debenture in a body, a legal or equitable interest in shares or debentures; or an option to acquire shares or debentures
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In principle, all offers of securities to investors and invitations require disclosure documents (s700(2)) Offers that do not need disclosure: section 708 Small-scale, personal offers: When personal offers are made to a maximum of 20 investors in any 12 month period and with no more that $2mil being raised (1) Sophisticated investors: Corp Act offers to be made to ‘sophisticated investors’ without a disclosure document (8) Professional investors: Corp Act permits offers to be made to ‘professional investors’ without a disclosure document (11) Offers to persons associated with the company: Permits offers of securities to be made to people closely connected to the company or its officers without a disclosure document (12) Offers for no consideration: Permits offers of securities (other than options) that do not require consideration to be made without a disclosure document (15). This means that offers for the free issue or transfer of securities do not need disclosure Offers under schemes, takeovers or deeds of company arrangement: Permits offers of securities made in connection with a scheme of arrangement, takeover or deed of company arrangement to be made without a disclosure document (17, 17A, 18) Rights issues of quotes securities (708AA) Range of Disclosure Documents: Corp Act makes provision for 4 types of disclosure documents that may be used for offering securities to prospective investors - 1. Prospectus: Prepared for an offer of securities under Ch 6D of the Act: s709(1). It is a detailed, and often lengthy, full-disclosure document 2. Short-form prospectus: s712 permits the use of short-form prospectus. It refers to material already
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