BLAW20001 Lecture Notes - Lecture 9: Retained Earnings, Selective Reduction, Initial Public Offering

• School: University of Melbourne
• Department: Business Law
• Course: BLAW20001
• Professor: Helen Anderson

Document Summary

Need shareholders to be in a position of power to remove directors as a way of keeping directors responsive to shareholder needs: can protect shareholders" rights by protecting their capital, helps maintain the right balance of power. Sha(cid:396)eholde(cid:396)s a(cid:396)e o(cid:449)(cid:374)e(cid:396)s of (cid:272)o(cid:373)pa(cid:374)(cid:455) he(cid:374)(cid:272)e (cid:374)eed to (cid:271)e p(cid:396)ote(cid:272)ted. Increasing share capital: directors" manage company day-to-day, hence they decide whether to issue shares, every power of directors" is subject to their "directors duties" Process of share issue: decision to issue share capital is a decision of the board s. 189a, directors must exercise their share issue power for a proper purpose. Ipos i(cid:374)itial pu(cid:271)li(cid:272) offe(cid:396)i(cid:374)g: existing private company wants to list on stock exchange, provides prospectus for public to subscribe to shares. Placing shares in private companies instead of going to the public. Rights issues: right to buy into the company according to existing shareholding.