The Law of Corporate Finance: General Principles and EU Law: Volume III: Funding, Exit, Takeovers

132 5 Equity and Shareholders’ Capital First, the firm wants to ensure that it has assets that will not have to be repaid to inv ...

5.1 The Equity Technique, Different Perspectives 133 that has a lower ranking in the insolvency of the company (subordinated cla ...

134 5 Equity and Shareholders’ Capital Equity from a legal perspective. This raises the question what “equity” means from a lega ...

5.1 The Equity Technique, Different Perspectives 135 The fundamental principle of IAS 32 is that a financial instrument should b ...

136 5 Equity and Shareholders’ Capital some characteristics of equity. They also give the holder the right to request redemption ...

5.1 The Equity Technique, Different Perspectives 137 base must consist of Tier 1 capital as defined in the Basel II Accord. Elem ...

138 5 Equity and Shareholders’ Capital 5.2 Share-based Equity and Equity That Is Not Share-based Not Share-based As explained ab ...

5.2 Share-based Equity and Equity That Is Not Share-based 139 may validly choose not to comply with the company’s contractual ob ...

140 5 Equity and Shareholders’ Capital 5.3 The Legal Capital Regime There is a connection between the concepts of “equity”, shar ...

5.3 The Legal Capital Regime 141 when the board submits a proposal to reduce “own capital” by distributing it to sharehold- ers. ...

142 5 Equity and Shareholders’ Capital For all such reasons, the legal capital regime protects the firm by creating equity capit ...

5.3 The Legal Capital Regime 143 a bank can leverage its equity capital base. (a) In the US, the Federal Deposit In- surance Cor ...

144 5 Equity and Shareholders’ Capital If adopted, the provisions of the Uniform Fraudulent Transfer Act enable a creditor to av ...

5.4 The Legal Capital Regime Under EU Company Law 145 holders or not regarded as distributions. If designed properly, an equity- ...

146 5 Equity and Shareholders’ Capital terprise forms not covered by the Second Directive.^55 Legal capital regimes are neverthe ...

5.4 The Legal Capital Regime Under EU Company Law 147 Excursion: Why increase or reduce share capital? The distribution of subsc ...

148 5 Equity and Shareholders’ Capital Restrictions on use and distribution – main rules. The fixed minimum capital requirements ...

5.4 The Legal Capital Regime Under EU Company Law 149 However, where shares are issued for a consideration other than in cash a ...

150 5 Equity and Shareholders’ Capital reholders right of pre-emption;^84 the authorisation to acquire own shares;^85 re- ductio ...

5.4 The Legal Capital Regime Under EU Company Law 151 ments.^97 Furthermore, compliance with additional reporting and notificati ...