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Page 161

CHAPTER 14
DIVIDENDS

of paid up shares, debentures or debenture stock of any other company or in any one or more of such ways."
Profits are capitalised by the passing of a resolution in general meeting capitalising the profits, and declaring that out of the sum so capitalised a bonus shall be paid to the shareholders to be satisfied by the distribution of unissued shares or debentures in the company. (25) An alternative method is to capitalise a portion of the profits by transferring them from profit and loss or reserve account to share or loan capital account, to apply the amount so transferred in payment of unissued shares or debentures, and then to distribute the newly issued shares or debentures among the shareholders.(26) A stamp duty of ten per cent. is payable on bonus issues of shares or other securities. (27)
Table A, Art. 128, provides:
" The company in general meeting may upon the recommendation of the directors resolve that it is desirable to capitalise any part of the amount for the time being standing to the credit of any of the company's reserve accounts or to the credit of the profit and loss account or otherwise available for distribution and accordingly that such sum be set free for distribution amongst the members who would have been entitled thereto if distributed by way of dividend and in the same proportions on condition that the same be not paid in cash but be applied either in or towards paying up any amounts for the time being unpaid on any shares held by such members respectively or paying up in full unissued shares or debentures of the company to be allotted and distributed credited as fully paid up to and amongst such members in the proportions aforesaid or partly in the one way and partly in the other and the directors shall give effect to such resolution:
Provided that a share premium account and a capital redemption reserve fund may, for the purposes of this regulation, only be applied in the paying up of unissued shares to be issued to members of the company as fully paid bonus shares."

Bonus shares or shares or debentures distributed to the shareholders by capitalising profits are accretions to capital and not income, so that super-tax or surtax is not payable in respect of them. z 5 Income tax, of course, is payable by the company on the profits before they are capitalised, and therefore any bonus declared is usually declared free of tax.
Even though an option is given by the company to the shareholders to take the bonus distribution in cash instead of in shares or debentures, the distribution will be a distribution of capital if there is a clear intention on the part of the company to capitalise its profits. (28) The

25 Inland Rev. Commrs. v. Blott, [1921] 2 A. C. 171.
26 See precedent in Stiebel's Company Law (3rd ed.), p. 568.
27 Finance Act, 1947, s. 60.
28 Commrs. of Inland Rev. v. Wright, [1927] 1 K. B. 333.

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where is HTML where is HEAD where is TITLE of paid up shares, debentures or debenture stock of any other company or in any one or more of such ways." Profits are capitalised by what is passing of a resolution in general meeting capitalising what is profits, and declaring that out of what is sum so capitalised a bonus shall be paid to what is shareholders to be satisfied by what is distribution of unissued shares or debentures in what is company. (25) An alternative method is to capitalise a portion of what is profits by transferring them from profit and loss or reserve account to share or loan capital account, to apply what is amount so transferred in payment of unissued shares or debentures, and then to distribute what is newly issued shares or debentures among what is shareholders.(26) A stamp duty of ten per cent. is payable on bonus issues of shares or other securities. (27) Table A, Art. 128, provides: " what is company in general meeting may upon what is recommendation of what is directors resolve that it is desirable to capitalise any part of what is amount for what is time being standing to what is credit of any of what is company's reserve accounts or to what is credit of what is profit and loss account or otherwise available for distribution and accordingly that such sum be set free for distribution amongst what is members who would have been entitled thereto if distributed by way of dividend and in what is same proportions on condition that what is same be not paid in cash but be applied either in or towards paying up any amounts for what is time being unpaid on any shares held by such members respectively or paying up in full unissued shares or debentures of what is company to be allotted and distributed credited as fully paid up to and amongst such members in what is proportions aforesaid or partly in what is one way and partly in what is other and what is directors shall give effect to such resolution: Provided that a share premium account and a capital redemption reserve fund may, for what is purposes of this regulation, only be applied in what is paying up of unissued shares to be issued to members of what is company as fully paid bonus shares." Bonus shares or shares or debentures distributed to what is shareholders by capitalising profits are accretions to capital and not income, so that super-tax or surtax is not payable in respect of them. z 5 Income tax, of course, is payable by what is company on what is profits before they are capitalised, and therefore any bonus declared is usually declared free of tax. Even though an option is given by what is company to what is shareholders to take what is bonus distribution in cash instead of in shares or debentures, what is distribution will be a distribution of capital if there is a clear intention on what is part of what is company to capitalise its profits. (28) what is 25 Inland Rev. Commrs. v. Blott, [1921] 2 A. C. 171. 26 See precedent in Stiebel's Company Law (3rd ed.), p. 568. 27 Finance Act, 1947, s. 60. 28 Commrs. of Inland Rev. v. Wright, [1927] 1 K. B. 333. 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 161 where is strong CHAPTER 14 DIVIDENDS where is p align="justify" of paid up shares, debentures or debenture stock of any other company or in any one or more of such ways." Profits are capitalised by what is passing of a resolution in general meeting capitalising what is profits, and declaring that out of the sum so capitalised a bonus shall be paid to what is shareholders to be satisfied by what is distribution of unissued shares or debentures in what is company. (25) An alternative method is to capitalise a portion of what is profits by transferring them from profit and loss or reserve account to share or loan capital account, to apply what is amount so transferred in payment of unissued shares or debentures, and then to distribute what is newly issued shares or debentures among what is shareholders.(26) A stamp duty of ten per cent. is payable on bonus issues of shares or other securities. (27) Table A, Art. 128, provides: " what is company in general meeting may upon what is recommendation of what is directors resolve that it is desirable to capitalise any part of what is amount for what is time being standing to what is credit of any of what is company's reserve accounts or to what is credit of what is profit and loss account or otherwise available for distribution and accordingly that such sum be set free for distribution amongst what is members who would have been entitled thereto if distributed by way of dividend and in what is same proportions on condition that what is same be not paid in cash but be applied either in or towards paying up any amounts for what is time being unpaid on any shares held by such members respectively or paying up in full unissued shares or debentures of what is company to be allotted and distributed credited as fully paid up to and amongst such members in what is proportions aforesaid or partly in what is one way and partly in what is other and what is directors shall give effect to such resolution: Provided that a share premium account and a capital redemption reserve fund may, for what is purposes of this regulation, only be applied in what is paying up of unissued shares to be issued to members of what is company as fully paid bonus shares." Bonus shares or shares or debentures distributed to what is shareholders by capitalising profits are accretions to capital and not income, so that super-tax or surtax is not payable in respect of them. z 5 Income tax, of course, is payable by what is company on what is profits before they are capitalised, and therefore any bonus declared is usually declared free of tax. Even though an option is given by what is company to what is shareholders to take what is bonus distribution in cash instead of in shares or debentures, what is distribution will be a distribution of capital if there is a clear intention on what is part of what is company to capitalise its profits. (28) what is 25 Inland Rev. Commrs. v. Blott, [1921] 2 A. C. 171. 26 See precedent in Stiebel's Company Law (3rd ed.), p. 568. 27 Finance Act, 1947, s. 60. 28 Commrs. of Inland Rev. v. Wright, [1927] 1 K. B. 333. where is Server.Execute("_SiteMap.asp") %

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