A really stupid question
wills135
Registered Posts: 30
This is as per the title.
Can a company spend its share capital?
I understand that the share capital transaction can not be a straight Dr Share cap. Cr Bank.
Together with share capital can not be distributed via a dividend.
But if a company has £100 share capital in the bank, and the account goes overdrawn the company has spent the cash.
The answer is most likely a yes of course, it's an investment in the company so the company can do as it sees fit
Thank you
Can a company spend its share capital?
I understand that the share capital transaction can not be a straight Dr Share cap. Cr Bank.
Together with share capital can not be distributed via a dividend.
But if a company has £100 share capital in the bank, and the account goes overdrawn the company has spent the cash.
The answer is most likely a yes of course, it's an investment in the company so the company can do as it sees fit
Thank you
1
Comments
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Anybody?0
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Lovely thank you.
I'm not sure why but I thought that maybe the share capital was sort of ring fenced and it written somewhere that the initial £100 could never be spent.
But then if a company ever goes overdrawn then clearly the amount has been spent.
You've helped greatly.
Thank you0 -
I pay Kaplan for my distance learning course and I ask questions of them yet I'm told that they will only answer questions based around the study text.
That's all good and well, I suppose, but without the privilege of being in a classroom, and having a tutor to bounce questions off it does leave many questions unanswered.
I appreciate people like yourself Mick who offer your knowledge on forums such as this.
1
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