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The concept of capital maintenance is geared substantially towards the protection of creditors of the company who in the eyes

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The concept of capital maintenance is geared substantially towards the protection of creditors of the company who in the eyes of the law, have an interest in the paid up share capital and other assets of the company. A company is prohibited from reducing its issued share capital. Thus, a company is prohibited from giving financial assistance as one of the rule to maintain the companys capital. Based on the statement above critically discuss THREE (3) transactions that constitute financial assistance. Support your answer with relevant statutory provisions of the Companies Act 2016 and decided cases.

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Explanation portion of share capital andreduce the share View the full answer


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Related Book For  answer-question
Financial Accounting Theory and Analysis Text and Cases

Financial Accounting Theory and Analysis Text and Cases

ISBN: 978-1118582794

11th edition

Authors: Richard G. Schroeder, Myrtle W. Clark, Jack Cathey

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Posted Date: September 26, 2019 08:49:45
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