266 17: Capital maintenance and dividend law Part E Capital and the financing of companies
Answers to Quick Quiz
1 A and C. The only guarantee that the courts will accept is from the company's bank.
2 Distributable profits may be defined as accumulated realised profits less accumulated realised losses.
3 D. All three may be liable.
4 Share premium account
Capital redemption reserve
A surplus of accumulated unrealised profits over accumulated unrealised losses (revaluation reserve)
Any reserve which the company is prohibited from distributing by statute or by its constitution or any law.
5 A private company does not need to apply to the court to reduce its share capital if it supports its special
resolution with a solvency statement.(^) Now try the questions below from the Practice Question Bank
Number
37, 38, 39