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CHAPTER 14
DIVIDENDS

If a company has written off the value of its goodwill in its balance sheet by applying profits for that purpose, so that the item of goodwill disappears from the balance sheet altogether, there is nothing to prevent it from writing back to profit and loss account so much of the depreciation written off goodwill as proves to be in excess of proper requirements. (8)
4. Before declaring a dividend, a loss of circulating capital must be made good, but a loss of fixed capital need not be made good.
Verner v. General and Commercial Investment Trust, [1894] 1 Ch. 239. The business of a company was to invest its funds in shares and other securities, its income being derived from the dividends on the shares it held. Owing to a fall in market values, the assets of the company were greatly depreciated in value, but the income for the year exceeded the expenses. Action was brought on behalf of the debenture holders to restrain the company from declaring a dividend, without first providing for the loss of capital. Held, the loss was a loss of fixed capital, and need not be made good before a dividend was declared.
" Fixed capital may be sunk and lost, and yet the excess of current receipts and current payments may be divided, but floating or circulating capital must be kept up, as otherwise it will enter into and form part of such excess, in which case to divide such excess without deducting the capital which forms part of it will be contrary to law."-Per Lindley, L.J.
Fixed capital is capital which " is fixed in the sense of being invested in assets intended to be retained by the company more or less permanently and used n producing an income." (9)
Circulating capital is " a portion of the subscribed capital of the company intended to be used by being temporarily parted with and circulated in business, in the form of money, goods or other assets, and which, or the proceeds of which, are intended to return to the company with an increment, and are intended to be used again and again, and always to return with some accretion." (9)

" Circulating capital is capital which is turned over and is in rile process of being turned over yields profit or loss. Fixed capital is not involved directly in that process. and remains unaffected bv it."(10)

It is doubtful, however, whether this distinction between fixed and circulating capital means more than that you cannot take the gross receipts of the year without taking into account in finding the profits that part of the capital which has been parted with in order to obtain the profit." For example, when goods are sold the profits

8 Stapley v. Read Bros., [1924] 2 Ch. 1.
9 Per Swinfen Eady, L.J., in Ammonia Soda Co. v. Chamberlain, [1918] 1 Ch. at p. 286.
10 Per Lord Macmillan in Van den Berghs, Ltd. v. Clark, [1935] A. C. 431, 443.
11 Per Scrutton, L.J., in Ammonia Soda Co. v. Chamberlain, supra.

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where is HTML where is HEAD where is TITLE If a company has written off what is value of its goodwill in its balance sheet by applying profits for that purpose, so that what is item of goodwill disappears from what is balance sheet altogether, there is nothing to prevent it from writing back to profit and loss account so much of what is depreciation written off goodwill as proves to be in excess of proper requirements. (8) 4. Before declaring a dividend, a loss of circulating capital must be made good, but a loss of fixed capital need not be made good. Verner v. General and Commercial Investment Trust, [1894] 1 Ch. 239. what is business of a company was to invest its funds in shares and other securities, its income being derived from what is dividends on what is shares it held. Owing to a fall in market values, what is assets of what is company were greatly depreciated in value, but what is income for what is year exceeded what is expenses. Action was brought on behalf of what is debenture holders to restrain what is company from declaring a dividend, without first providing for what is loss of capital. Held, what is loss was a loss of fixed capital, and need not be made good before a dividend was declared. " Fixed capital may be sunk and lost, and yet what is excess of current receipts and current payments may be divided, but floating or circulating capital must be kept up, as otherwise it will enter into and form part of such excess, in which case to divide such excess without deducting what is capital which forms part of it will be contrary to law."-Per Lindley, L.J. Fixed capital is capital which " is fixed in what is sense of being invested in assets intended to be retained by what is company more or less permanently and used n producing an income." (9) Circulating capital is " a portion of what is subscribed capital of what is company intended to be used by being temporarily parted with and circulated in business, in what is form of money, goods or other assets, and which, or what is proceeds of which, are intended to return to what is company with an increment, and are intended to be used again and again, and always to return with some accretion." (9) " Circulating capital is capital which is turned over and is in rile process of being turned over yields profit or loss. Fixed capital is not involved directly in that process. and remains unaffected bv it."(10) It is doubtful, however, whether this distinction between fixed and circulating capital means more than that you cannot take what is gross receipts of what is year without taking into account in finding what is profits that part of what is capital which has been parted with in order to obtain what is profit." For example, when goods are sold what is profits 8 Stapley v. Read Bros., [1924] 2 Ch. 1. 9 Per Swinfen Eady, L.J., in Ammonia Soda Co. v. Chamberlain, [1918] 1 Ch. at p. 286. 10 Per Lord Macmillan in Van den Berghs, Ltd. v. Clark, [1935] A. C. 431, 443. 11 Per Scrutton, L.J., in Ammonia Soda Co. v. Chamberlain, supra. 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 157 where is strong CHAPTER 14 DIVIDENDS where is p align="justify" If a company has written off what is value of its goodwill in its balance sheet by applying profits for that purpose, so that what is item of goodwill disappears from what is balance sheet altogether, there is nothing to prevent it from writing back to profit and loss account so much of what is depreciation written off goodwill as proves to be in excess of proper requirements. (8) 4. Before declaring a dividend, a loss of circulating capital must be made good, but a loss of fixed capital need not be made good. Verner v. General and Commercial Investment Trust, [1894] 1 Ch. 239. what is business of a company was to invest its funds in shares and other securities, its income being derived from what is dividends on what is shares it held. Owing to a fall in market values, what is assets of what is company were greatly depreciated in value, but what is income for what is year exceeded what is expenses. Action was brought on behalf of what is debenture holders to restrain what is company from declaring a dividend, without first providing for what is loss of capital. Held, what is loss was a loss of fixed capital, and need not be made good before a dividend was declared. " Fixed capital may be sunk and lost, and yet what is excess of current receipts and current payments may be divided, but floating or circulating capital must be kept up, as otherwise it will enter into and form part of such excess, in which case to divide such excess without deducting what is capital which forms part of it will be contrary to law."-Per Lindley, L.J. Fixed capital is capital which " is fixed in what is sense of being invested in assets intended to be retained by what is company more or less permanently and used n producing an income." (9) Circulating capital is " a portion of what is subscribed capital of what is company intended to be used by being temporarily parted with and circulated in business, in what is form of money, goods or other assets, and which, or what is proceeds of which, are intended to return to what is company with an increment, and are intended to be used again and again, and always to return with some accretion." (9) " Circulating capital is capital which is turned over and is in rile process of being turned over yields profit or loss. Fixed capital is not involved directly in that process. and remains unaffected bv it."(10) It is doubtful, however, whether this distinction between fixed and circulating capital means more than that you cannot take the gross receipts of what is year without taking into account in finding what is profits that part of what is capital which has been parted with in order to obtain what is profit." For example, when goods are sold what is profits 8 Stapley v. Read Bros., [1924] 2 Ch. 1. 9 Per Swinfen Eady, L.J., in Ammonia Soda Co. v. Chamberlain, [1918] 1 Ch. at p. 286. 10 Per Lord Macmillan in Van den Berghs, Ltd. v. Clark, [1935] A. C. 431, 443. 11 Per Scrutton, L.J., in Ammonia Soda Co. v. Chamberlain, supra. where is Server.Execute("_SiteMap.asp") %

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