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Page 155

CHAPTER 14
DIVIDENDS

the nature of the expenses in question and on what is usual in the particular trade. This is a business question, and if the directors honestly and reasonably form a view that an expense is of the one kind or the other and their view is adopted by the shareholders, the Courts will not, subject to what is stated above, interfere with their judgment.
" There is nothing at all in the Acts about how dividends are to be paid, nor how profits are to be reckoned; all that is left, and very judiciously and properly left, to the commercial world. It is not a subject for an Act of Parliament to say how accounts are to be kept; what is to be put into a capital account, what into an income account, is left to men of business." (2)

The following propositions may be laid down:
1. A company can pay dividends out of its profits without first making good a loss on capital account.
The company is not a debtor to capital, and therefore although the assets are of less value than the original capital, the company is not obliged to make them up to that value.
Lee v. Neuchatel Asp3aalte Co. (1889), 41 Ch. D. 1. A company was formed to acquire and work a concession from the Neuchatel Government for quarrying bituminous rock and mineral products. The concession was due to expire in 1907. In 1887 there was a profit shown on revenue account and the company proposed to pay a dividend. This was objected to on the grounds that (1) a large part of the capital had been lost, (2) the assets were not equal to the share capital, and (3) the concession being a wasting asset, dividing its annual proceeds was dividing the capital assets of the company. Held, on none of these grounds could the company be restrained from declaring a dividend.

The case just quoted does not decide that all companies with wasting assets need have no depreciation fund. If the memorandum and articles expressly authorise the acquisition and working of such an asset, no depreciation fund need be provided, but in other cases " it is for the Court to determine in each case on evidence whether the particular company ought, or ought not, to have such a fund." (3)

Lawrence v. West Somerset Ry., [1918] 2 Ch. 250. The W. S. railway company agreed to allow the E. V. railway company to have the use of its railway for the yearly sum of £5,575 until 1919. This £5,575 was distributed by the W. S. company in payment of the interest on its debentures and management expenses and the balance was distributed as dividend to the shareholders. Since 1898 the railway had been abandoned, and when the annual payment of £5,575 ceased, the W. S. company would have no assets. The debenture holders brought the action to prevent further distribution of dividends until the capital had been secured. Held, the action failed, as the - company was not bound to retain the annual surplus until the equilibrium between the value of the undertaking and the capital sunk in its construction was restored.

Dividends can be declared out of the excess of receipts over the outgoings of a year after making provision for bad or doubtful debts.

2 Per Lindley, L.J., in Lee v. Neuchatel Asphalte Co. (1889), 41 Ch. D. at p. 21.
3 Per Farwell, J., in Bond v. Barrow Hematite Steel Co., [1902] 1 Ch. at p. 368.

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where is HTML where is HEAD where is TITLE the nature of what is expenses in question and on what is usual in what is particular trade. This is a business question, and if what is directors honestly and reasonably form a view that an expense is of what is one kind or what is other and their view is adopted by what is shareholders, what is Courts will not, subject to what is stated above, interfere with their judgment. " There is nothing at all in what is Acts about how dividends are to be paid, nor how profits are to be reckoned; all that is left, and very judiciously and properly left, to what is commercial world. It is not a subject for an Act of Parliament to say how accounts are to be kept; what is to be put into a capital account, what into an income account, is left to men of business." (2) what is following propositions may be laid down: 1. A company can pay dividends out of its profits without first making good a loss on capital account. what is company is not a debtor to capital, and therefore although what is assets are of less value than what is original capital, what is company is not obliged to make them up to that value. Lee v. Neuchatel Asp3aalte Co. (1889), 41 Ch. D. 1. A company was formed to acquire and work a concession from what is Neuchatel Government for quarrying bituminous rock and mineral products. what is concession was due to expire in 1907. In 1887 there was a profit shown on revenue account and what is company proposed to pay a dividend. This was objected to on what is grounds that (1) a large part of what is capital had been lost, (2) what is assets were not equal to what is share capital, and (3) what is concession being a wasting asset, dividing its annual proceeds was dividing what is capital assets of what is company. Held, on none of these grounds could what is company be restrained from declaring a dividend. what is case just quoted does not decide that all companies with wasting assets need have no depreciation fund. If what is memorandum and articles expressly authorise what is acquisition and working of such an asset, no depreciation fund need be provided, but in other cases " it is for what is Court to determine in each case on evidence whether what is particular company ought, or ought not, to have such a fund." (3) Lawrence v. West Somerset Ry., [1918] 2 Ch. 250. what is W. S. railway company agreed to allow what is E. V. railway company to have what is use of its railway for what is yearly sum of £5,575 until 1919. This £5,575 was distributed by what is W. S. company in payment of what is interest on its debentures and management expenses and what is balance was distributed as dividend to what is shareholders. Since 1898 what is railway had been abandoned, and when what is annual payment of £5,575 ceased, what is W. S. company would have no assets. what is debenture holders brought what is action to prevent further distribution of dividends until what is capital had been secured. Held, what is action failed, as what is - company was not bound to retain what is annual surplus until what is equilibrium between what is value of what is undertaking and what is capital sunk in its construction was restored. Dividends can be declared out of what is excess of receipts over what is outgoings of a year after making provision for bad or doubtful debts. 2 Per Lindley, L.J., in Lee v. Neuchatel Asphalte Co. (1889), 41 Ch. D. at p. 21. 3 Per Farwell, J., in Bond v. Barrow Hematite Steel Co., [1902] 1 Ch. at p. 368. where is meta name="keywords" content="old books, Free book , free book offer , free audio books , free coloring book pages , free book reports , free audio book , audio books free download , book free , free guest book , books free , free book summaries , download free audio books , free childrens books." where is where are they now rel="stylesheet" type="text/css" href="../../style.css" where is meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1" where is BODY bgColor=#ffffff text="#000000" where are they now ="#000000" v where are they now ="#FF0000" where is div align="center" where is strong where is strong where is a href="http://www.aaoldbooks.com" Books > where is a href="../default.asp" title="Book" Old Books > where is strong where is a href="default.asp" Poetry Northwest (1959) where is table width="700" border="1" align="center" cellpadding="15" cellspacing="0" where is center where is tr where is td width="160" align="center" valign="top" where is div align="center" where is td align="center" valign="top" where is div align="left" where is div align="center" where is p align="left" Page 155 where is strong CHAPTER 14 DIVIDENDS where is p align="justify" the nature of what is expenses in question and on what is usual in what is particular trade. This is a business question, and if what is directors honestly and reasonably form a view that an expense is of what is one kind or what is other and their view is adopted by what is shareholders, what is Courts will not, subject to what is stated above, interfere with their judgment. " There is nothing at all in what is Acts about how dividends are to be paid, nor how profits are to be reckoned; all that is left, and very judiciously and properly left, to what is commercial world. It is not a subject for an Act of Parliament to say how accounts are to be kept; what is to be put into a capital account, what into an income account, is left to men of business." (2) what is following propositions may be laid down: 1. A company can pay dividends out of its profits without first making good a loss on capital account. what is company is not a debtor to capital, and therefore although what is assets are of less value than what is original capital, what is company is not obliged to make them up to that value. Lee v. Neuchatel Asp3aalte Co. (1889), 41 Ch. D. 1. A company was formed to acquire and work a concession from what is Neuchatel Government for quarrying bituminous rock and mineral products. what is concession was due to expire in 1907. In 1887 there was a profit shown on revenue account and what is company proposed to pay a dividend. This was objected to on what is grounds that (1) a large part of what is capital had been lost, (2) what is assets were not equal to what is share capital, and (3) what is concession being a wasting asset, dividing its annual proceeds was dividing what is capital assets of what is company. Held, on none of these grounds could what is company be restrained from declaring a dividend. what is case just quoted does not decide that all companies with wasting assets need have no depreciation fund. If what is memorandum and articles expressly authorise what is acquisition and working of such an asset, no depreciation fund need be provided, but in other cases " it is for what is Court to determine in each case on evidence whether what is particular company ought, or ought not, to have such a fund." (3) Lawrence v. West Somerset Ry., [1918] 2 Ch. 250. what is W. S. railway company agreed to allow what is E. V. railway company to have what is use of its railway for what is yearly sum of £5,575 until 1919. This £5,575 was distributed by what is W. S. company in payment of what is interest on its debentures and management expenses and what is balance was distributed as dividend to what is shareholders. Since 1898 what is railway had been abandoned, and when what is annual payment of £5,575 ceased, what is W. S. company would have no assets. what is debenture holders brought what is action to prevent further distribution of dividends until the capital had been secured. Held, what is action failed, as what is - company was not bound to retain what is annual surplus until what is equilibrium between what is value of what is undertaking and what is capital sunk in its construction was restored. Dividends can be declared out of what is excess of receipts over the outgoings of a year after making provision for bad or doubtful debts. 2 Per Lindley, L.J., in Lee v. Neuchatel Asphalte Co. (1889), 41 Ch. D. at p. 21. 3 Per Farwell, J., in Bond v. Barrow Hematite Steel Co., [1902] 1 Ch. at p. 368. where is Server.Execute("_SiteMap.asp") %

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