Environmental Management Of Contaminants And Pollution - 3025 Words

The Role Of Science In Environmental Management Of Contaminants And Pollution (Research Paper Sample) Content: Name of the Institution Course Name Students Name Capital Maintenance Doctrine The capital maintenance doctrine outlines that a company should ensure shares consideration that are issued in the company. The received capital should not be repaid to the shareholders except in specified circumstances. The doctrine was first developed in the United Kingdom in the mid-19th century. Its premises specifies that credit provided to businesses by the creditors is based on the expressed account that it will be solely applied for the business to make profits and when a company is wound up, then will the share capital be functional and will paid, first to the creditors themselves and then to the shareholders( Protocor, 2007). Solomon (2013), suggested that it was mainly developed to protect creditors and it performs that function by a way of limiting the shareholders payment capital in the following ways: first, shareholders are only paid dividends from profit after tax which is distributable, for the existing capital to be reduced, a court sanction is needed except under instances of redesignation of the ostensible value of shares, when a company is need of financial assistance, it is generally prohibited from acquiring its own shares (financial assistance) except for some certain stated circumstances and lastly a buy-back clause can be incorporated to allow a company to purchase its own shares but it is only to be out of the distributable profits or a new issue proceeds with only some few certain exceptions. However, as result of business evolution, the capital maintenance doctrine has gone through various amendments to make suitable with current trends notably, the Companies Act 2006 did bring on board a number which include but not limited to : a new course of action was put in place to make it possible for companies to decrease their share capital by a way of a special resolution which is to be supported by all directors of the company as compared to the previous one of a court approval for the reduction to be undertaken and it was previously possible for only unlimited company and unlike the whitewash procedures, the new method does not require an auditors report and the creditors have no right to reject the share reduction (Protocor, 2007). The traditional whitewash procedure...