Rachna R.’s Post

Many people have invested in #shares in recent years as the #stockmarket has boomed. But with markets proving extremely volatile in recent months, have you decided enough is enough or will you be hanging on in the hope of ever-increasing returns? Here’s what you need to know about your #tax position if you buy, sell or hold shares writes Mark Chapman, director of tax communications at H&R Block (NYSE:HRB). The most common way for companies to pay returns to #shareholders is by way of a #cashdividend.  Significantly, whether you hold shares in a private company or a publicly listed one, the rules about how you’re taxed on any dividends you receive as a shareholder are essentially the same. #Dividends are paid out of profits which have already been subject to #Australiancompanytax which is currently 30% (or 25% for small companies). More at #Proactive #ProactiveInvestors http://ow.ly/xPe7105NmAr

Investing in fractional shares allows investors to own less than a full share of a stock, has become popular in many markets around the world. However, in India, the practice of buying, selling, or trading fractional shares is not permitted under the current regulatory framework. However, the Company Law Committee in its March 2022 report recommended enabling the issuance, possession, and transfer of fractional shares in dematerialized form for a prescribed class of companies. The Committee proposed amending the Companies Act, 2013, ("the Act") to allow fractional share investing, considering the increasing participation of retail shareholders in the market. The Indian financial market operates under strict government supervision, notably limiting DEMAT account operations, which are confined to the National Securities Depository Limited (NSDL) and the Central Depository Services Limited (CDSL), with brokers serving merely as intermediaries. The Committee, in its report, also examined the concept of issuance and retention of fractional shares but noted the existing prohibition under Section 4(1)(e)(i) of the Act which mandates that subscribers to the memorandum of association must agree to subscribe to at least one share and paragraph four of Table F in Schedule I prohibiting the possession of fractional shares. Acknowledging the utility of fractional shares in mergers, bonus issues, or rights issues, the Committee proposed amendments to the 2013 Act to enable the issuance, retention, and transfer of fractional shares for specific company categories under prescribed regulations. But what are the benefits of Fractional Share Investments? - Dividend Reinvestment: Introduction of fractional shares enables brokerage firms to facilitate wealth compounding through dividend reinvestment options. - Accessibility: Fractional shares diminish financial barriers, allowing broader participation in the stock market, which enhances the potential for significant investment returns. - Investment Strategy Enhancement: The adoption of dollar-cost averaging, through regular investment irrespective of market conditions, mitigates risks associated with market volatility, optimizing investment across diverse market cycles. Despite the benefits, there are certain challenges associated as well: - Voting Rights: Empirical analysis indicates a potential dilution of shareholder influence in corporate governance, with brokers potentially commanding disproportionate voting power in decision-making processes. - Stock Availability: The availability of fractional shares may be limited to certain companies, potentially undermining investment diversification objectives. - Market Liquidity: Fractional shares may exhibit reduced liquidity relative to whole shares. Brokerage practices could intensify this issue by accumulating sufficient fractional units prior to order execution, which could affect the trading velocity and market dynamics of the shares. #companylaw

In 1844 the joint stock company act was passed, which allowed individual companies to be formed without a royal charter or act of Parliament. The new corporate structure proved very popular. Large infrastructure projects and risky trading ventures, previously carried out by unwieldy partnerships or associations of thousands, were now a single legal personality. Public investors could subscribe to be members of the company and receive a share, and from 1856 they assumed no exposure to the liabilities of the company beyond that initial investment. Of course in those days there were not millions of small businesses as there are today. This brings me to my thesis: the widespread obsolescence of the very concept of shares. Nowadays, substantial investment are almost never structured as share subscriptions. The nominal value of the shares therefore becomes meaningless. It is time, in my opinion, for the limited liability afforded to investors in companies with less than £10,000 of share capital placed at risk, to be looked at again.

The growing clout of proxy advisory firms? A Mint review of filings made by public companies to the National Stock Exchange showed that between 1 April and 27 July, large public institutions opposed at least 137 resolutions of 1,300—about one in 10—put forth by 650 companies. Each of these 137 resolutions saw at least 33% votes against the resolution, as per Mint's research. These include the continuation of Pranav Adani, Gautam Adani's nephew, as a director at Adani Wilmar Ltd; chairman Gautam Singhania at Raymond Ltd; vice chairperson Radhika Piramal at VIP Industries Ltd; and chairman Habil Khorakiwala at Wockhardt Ltd.  https://lnkd.in/gPgCt7xq

𝙊𝙧𝙙𝙞𝙣𝙖𝙧𝙮 𝙎𝙝𝙖𝙧𝙚𝙨 𝙫𝙨. 𝙋𝙧𝙚𝙛𝙚𝙧𝙚𝙣𝙘𝙚 𝙎𝙝𝙖𝙧𝙚𝙨: 𝘼 𝙕𝙖𝙢𝙗𝙞𝙖𝙣 𝙄𝙣𝙫𝙚𝙨𝙩𝙤𝙧’𝙨 𝙂𝙪𝙞𝙙𝙚 Investing on the Lusaka Securities Exchange Plc is like choosing which meal you want at a restaurant. The foods may look appetizing, but they offer different benefits depending on what you're in the mood for. Let’s break down ordinary shares and preference shares. 𝑶𝒓𝒅𝒊𝒏𝒂𝒓𝒚 𝑺𝒉𝒂𝒓𝒆𝒔 Advantages: 1. Voting Rights: Ordinary shareholders can vote at company meetings. Imagine it’s like getting to vote on whether the office tea break will include fritters or buns. 2. Higher Dividends (Sometimes): If the company does well, you might get a big share of the profits. It’s like getting an unexpected top-up of nshima because there’s plenty to go around. 3. Capital Growth: When the company grows, your shares might increase in value. Think of it as buying a plot in Chalala and finding out later that it’s now a prime residential area. Disadvantages: 1. Last in Line: In case the company gets liquidated, ordinary shareholders are the last to be paid. It’s like joining a queue for relish at a party, only to find out the chicken has finished, leaving only cabbage. 2. Uncertain Dividends: Dividends aren’t guaranteed. If the company decides to reinvest profits, you might go home with nothing, like waiting for rain-fed maize to ripen when it hasn’t rained for months. 𝑷𝒓𝒆𝒇𝒆𝒓𝒆𝒏𝒄𝒆 𝑺𝒉𝒂𝒓𝒆𝒔 Advantages: 1. Fixed Dividends: Preference shareholders get regular dividends before ordinary shareholders. It’s like knowing your bus from Matero to Town always leaves on time, no matter the traffic. 2. Priority in Liquidation: If the company is liquidated, preference shareholders get paid first. It’s like being the first in line at the cash desk when the ATM starts dispensing money again after being “out of service.” Disadvantages: 1. No Voting Rights: Preference shareholders usually don’t get a say in the company’s decisions. It’s like watching a football match but not being allowed to shout instructions to the players. 2. Limited Upside: Fixed dividends mean you won’t earn more even if the company does extremely well. It's like watching a movie where the ending is always the same, no matter how exciting the story gets. What Preference Shares Are on the LuSE? On the LuSE app, an example of preference shares is 'Real Estate Investment Zambia Prefs.' These shares are tied to the Real Estate Investments Zambia (REIZ) company, a key player in property development. Which Should You Choose? If you want to grow your investment and don’t mind some risk, go for ordinary shares. If you prefer stability and consistency (and don’t care about voting), preference shares are your nshima. Remember, investing is a journey, whether you’re building wealth for future generations, your children’s school fees, or retirement in Siavonga, understanding these basics will help you get there. #shares #Investments

How Promoters benefit themselves using Related Party Transactions Learn how to find out whether the promoters are using related party transactions to benefit at the cost of minority shareholders. https://lnkd.in/dC49ME7 .

How Promoters benefit themselves using Related Party Transactions Learn how to find out whether the promoters are using related party transactions to benefit at the cost of minority shareholders. https://lnkd.in/dC49ME7 .

In many jurisdictions, treasury shares are shares reacquired by a company which, instead of being cancelled on their re-acquisition, are held by the company in its “treasury” or are dormant until reissue or resale. This approach allows flexibility, as treasury shares are exempt from shareholders’ pre-emptive rights, enabling companies to reissue them without first offering them to existing shareholders. However, under the South African Companies Act, 2008, reacquired shares must be canceled and revert to authorised share capital, which the company may later reissue (Section 35(5)). An exception to the rule against treasury shares is made by permitting a subsidiary to acquire and hold up to 10% in aggregate of the issued shares of any class of shares of its parent company (section 48(2)(b)). Since a company cannot hold an ownership interest in itself, section 48(2)(b)(ii) specifies that a subsidiary may not exercise any voting rights attached to shares it holds in its parent company. However, nothing is stated about dividend rights, nor are there restrictions on selling these shares. Treasury shares occupy a unique position: they are non-voting, do not count toward quorum requirements, and remain accessible for future transactions. In this way, they offer flexibility, reducing the administrative burden of canceling and reissuing shares. ______________________________ ✨ Our Company acts for corporate buyers, sellers, investors, private equity funds, and the like. Feel free to reach out to us if you would like to book a consultation. ✨✨ If you like reading these “One-Liners”, please click the 🔔 (on my profile) so you don’t miss any new posts and please let me know your comments and share with others.

Can You Freely Transfer Shares in a Pvt Ltd Company? Here’s What You Need to Know!" Thinking of transferring shares in your Private Limited Company? It’s not as simple as you might think! While Public Limited Companies allow for open share transfers, Private Limited Companies have specific restrictions to maintain control and stability..... Here’s what you need to know about share transfers in a Pvt Ltd Company: Right of First Refusal (ROFR): If you’re a shareholder and want to sell your shares, you typically can’t just sell to anyone. The other shareholders often have the right to buy your shares first. This ensures that shares remain within the control of the company’s current owners. Company’s Approval: In most cases, the company’s board has the final say on whether shares can be transferred to an outsider. This prevents unwanted influences and keeps control within a trusted circle. Limited Liquidity: Unlike public companies, shares of Pvt Ltd companies aren’t traded on stock exchanges. While this means less liquidity, it also ensures more stable ownership. Pro Tip: Always review your company’s Articles of Association (AoA) before making any moves. It will detail all the rules and restrictions on share transfers. #Shareholders #PrivateCompany #CompanyLaw #CorporateGovernance #ShareTransfers #Entrepreneurship #BusinessLaw #BusinessStrategy #auditorsaab

Preference shareholders can influence the categorization of companies, transitioning them from subsidiaries to associates and vice versa (Section 47)   Every equity shareholder of a Co., is entitled to cast a vote on each resolution of the Co.; and the voting power of each member during a poll shall correspond to the proportion of their share in the Co's paid-up equity share capital.   Each PS in a Co. can vote only on matters that directly impact their preference shares. This includes votes on winding up or repayment or reduction of its equity or preference share capital. Their voting power in a poll is based on the amount of preference share capital they hold.   The ratio of voting rights for equity and preference shareholders will be the same as the ratio of their paid-up capital. Additionally, If the dividend for preference shares has not been paid for two years or more, the preference shareholders will have the right to vote on all company resolutions.   How the status of holding, subsidiary, and associate Co. may change over time, illustrated with examples.   XYZ Ltd. is a Co. with two shareholders: A Ltd. and B Ltd. A Ltd. possesses 4,000 equity shares, while B Ltd. holds 1,000 equity shares along with 5,000 preference shares. The total share capital of XYZ Ltd. comprises 5,000 equity shares and 5,000 preference shares.   Situation 1 – When dividend declared by the Co.. · XYZ Ltd. becomes a subsidiary Co. of A Ltd. as A Ltd. is holding more than 50% of the total voting power. · XYZ Ltd. becomes an associate Co. of B Ltd. as B Ltd is holding more than 20% of the total voting power. Situation 2 – When dividend is not declared for consecutive two years. · Where dividend is not paid to B Ltd. on the preference shares for consecutive two years, then B Ltd. will get voting powers as equity shares, thereby making B Ltd. the Holding Co. of XYZ Ltd.   For a company that possesses preference shares and is currently not declaring dividends, it is vital to keep track of compliance as well as the status of its subsidiary and associate entities. A Co. classified as a subsidiary today may later become an associate, and this transformation can occur in either direction. However, provision of Sec 47 does not apply to a private Co. if it is mentioned in its AOA.   It is essential to assess various important elements when working with this class of company, particularly in the context of investing in private organizations.   Considering the promoter's interest: if the company seeks to retain its voting power without experiencing dilution, it can revise its AOA prior to the execution of the transaction.   With respect to the interests of investors:, repayment, or reduction of if the Co's AOA feature a provision that restricts preference shareholders from obtaining voting rights after two consecutive years of not receiving dividends, investors will seek its removal before finalizing their investment in the Co. #happylearning #csstudents #companylaw #ICSI