Corporate Law

In: Business and Management

Submitted By lechu
Words 763
Pages 4
Restriction on the sale of the shares in the company
Ted can restrict the sale of the shares in the company due to few reasons. The first reason is to minimum subscription of shares. According to section 723 (2), the shares will not be issued till it receive the minimum number of shares or the minimum amount is raised. It means that the person making offer will not issue any shares till it reaches the minimum subscription condition is fulfilled. If the minimum subscription is not satisfied within the four months from the date of the disclosure, the company needs to take a few actions. The first action is to repay the money received to the applicants. Or need to hand the applicants a supplementary disclosure by changing the terms of the offer and give one month time to withdraw their applications and repaid or to issue securities and produce them a supplementary or different disclosure by changing the terms of the offer and one month time period will be given to return the securities and be repaid. All these compile under section 724.
The next reason is stock exchange listing. It brings more value when the shares are listed on the stock exchange. It also gives a protection to the securities holders once it complies with ASX listing requirements. Henceforth, if Ted’s Corporate Service written on disclosure documents that the securities will apply for listing in the stock exchange market; therefore, it should follow every procedure to be listed. If the securities not listed within the given time period, the issue will be invalid and Ted Corporate Service needs to repaid according to the disclosures.
The last reason is the expiration of disclosure documents. Each and every disclosure will be expired within 13 months after the date of issuing the shares. Based on Section 725 (3), if the application was obtained by Ted’s Corporate Service after the expiry date, the…...

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