Explain THREE (3) privileges available to shareholders/members of a company limited by shares with cumulative preference shares. (12 marks)
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Privileges available to members with cumulative preference shares
- The dividend shall not be payable on any shares ranking subsequent to the cumulative preferential class of shares, until all the arrears of that dividend have been paid.
- Cumulative preferential dividend holders shall not have further right to participate in dividends.
- On winding up arrears of cumulative preferential dividend whether or not earned or declared shall be payable up to date of actual payment as well as with distribution of assets.
- A floating charge is an equitable charge over the whole or specified part of the company’s undertaking and assets both present and future.
Section 87 of the Companies Act, 1963 ACT 179