country
$20 Bonus + 25% OFF
Securing Higher Grades Costing Your Pocket? Book Your Assignment at The Lowest Price Now!

The Maintenance Of Capital Doctrine

tag 0 Download3 Pages 611 Words tag Add in library Click this icon and make it bookmark in your library to refer it later. GOT IT

Question:

Discuss about the Maintenance of Capital Doctrine.

 

Answer:

History of Doctrine

The aspect of maintaining capital doctrine is a subject to debate from the very first day of its incorporation with the Australian Corporate law. The people had an assumption and perception that the doctrine was made to protect the creditors of an organization for assuring the application of equity capital by the organizational directors. There were gargantuan questions about the degree of achievement of the protective goals of this doctrine. For these issues, the legal statutes regarding the decisions of company capital of the corporate law has gone through a series of reforming process. As per the opinion of Gatt (2015, p.54), the first strategy depends upon linking decisions of corporate capital and the other upon solvency, disclosure of materials and fairness for the shareholders of an organization. The lawmakers of Australia had casted aside the prohibitive approaches in changes of corporate capital through mechanisms of permissive approach for procuring ease in the process of decision-making in capital related issues. The doctrine was established in the case between Trevor v Whitwwworth (1887) as the court depicted the need for an organization to stabilize the working capital for protecting the interest of the shareholders and creditors (Rickford, 2004, p.919).

Benefits of Doctrine

This doctrine has played a pivotal part in the aspect of regulatory capital of the banks and large scale corporate sectors. It has generated immense ease in the process of Commonwealth government’s FSI or Financial System Inquiry. As per the statement of Rickford (2004, p.910), it can be used to prevent the organizations to buy the shares of their own. Through this doctrine, the creditors of a company can have sustainable ground to protect their interest in the flow of working capital of a company. The section 260A reveals another assertive benefit of financial assistance in order to acquire shares by a holding company based on capital flow. This can be massively helpful to remain the capital same through a proficient process of maintenance that can procure equilibrium between flow of capital and subscribed capital (Austlii.edu.au, 2017).

Exceptions to the Doctrine

The section 257B of the Australian Corporations Act 2001 reveals the provision for the companies to buy back the shares with exception in capital maintenance. This division procures a massive exception as the companies can follow the process depicted through this section. There is another exception in the doctrine as the section 259A reveals the process of acquiring share bonds with direct process.On the other hand, this can be helpful to enhance transparency as in the section 256B of the Corporations Act 2001 of Australia; a company can make reduction in share capital only with authorization of the shareholders. Under this exception, the shareholders do not prejudice the ability of the organization in paying back the creditors through maintaining the capital flow. On the other hand, these exceptions can open up portal for the companies to re-purchase the share bonds from the creditors in order to maintain the capital structure of the organization intact to foster effectiveness in the maintenance (Austlii.edu.au, 2017).

 

Reference List

Austlii.edu.au (2017). Corporations Act. Available at: https://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s260a.html [Accessed on 14th may 2017]

Austlii.edu.au (2017). Corporations Act. Available at: https://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s259a.html [Accessed on 14th may 2017]

Gatt, K., (2015). The doctrine of capital maintenance with particular reference to the reduction of share capital. A legal and fiscal perspective. 2(5), p.54

Rickford, J., (2004). Reforming Capital Report of the Interdisciplinary Group on Capital Maintenance. EuR. Bus. l. REv., 15, p.919.

OR

Cite This Work

To export a reference to this article please select a referencing stye below:

My Assignment Help. (2018). The Maintenance Of Capital Doctrine. Retrieved from https://myassignmenthelp.com/free-samples/the-maintenance-of-capital-doctrine.

"The Maintenance Of Capital Doctrine." My Assignment Help, 2018, https://myassignmenthelp.com/free-samples/the-maintenance-of-capital-doctrine.

My Assignment Help (2018) The Maintenance Of Capital Doctrine [Online]. Available from: https://myassignmenthelp.com/free-samples/the-maintenance-of-capital-doctrine
[Accessed 06 April 2020].

My Assignment Help. 'The Maintenance Of Capital Doctrine' (My Assignment Help, 2018) <https://myassignmenthelp.com/free-samples/the-maintenance-of-capital-doctrine> accessed 06 April 2020.

My Assignment Help. The Maintenance Of Capital Doctrine [Internet]. My Assignment Help. 2018 [cited 06 April 2020]. Available from: https://myassignmenthelp.com/free-samples/the-maintenance-of-capital-doctrine.


MyAssignmenthelp.com is an Australia-based assignment help services that aims to fulfill students' requests 'can someone do my assignment online'. We have hired best-qualified and experienced assignment helper to assist students in crafting premier quality academic papers. Students are guaranteed to receive high-quality assignment writing assistance at an affordable price. This is why, we are considered as the best assignment solver.

Latest Management Samples

CAR20001 Finance For Accounting And Service Industry

Download : 0 | Pages : 9

Answer: Introduction Introduction to Accounting and Service Industry The main concern of this assessment is to analyse the role of accounting service industry in relation to other businesses which are operating in Australia. The accounting service industry has received immense recognition in the wake of scandals and growth of different businesses in the market. The main products which are offered by accounting service industry to different bus...

Read More arrow

MBA501 Dynamic Strategy And Disruptive Innovation Research

Download : 0 | Pages : 12

Answer: Introduction  Determination of the stakeholders is important for the contemporary business organizations due to the reason that diverse range of internal and external stakeholders is relevant in the current business scenario. The more effective will be the management of the stakeholders, the more will be the organizational competitiveness in the long term. However, it should also be noted that strategic approach should also be di...

Read More arrow

MAN302 Strategic Business Management For Differentiation Strategy

Download : 0 | Pages : 3
  • Course Code: MAN302
  • University: Kaplan Business School
  • Country: United States

Answer: It has been found that the Collins foods as their corporate strategy make use of the cost leadership and differentiation strategy. These strategies are aimed at achieving the competitive advantage over the market rivals. The company has adopted the differentiation strategy as it can result in severe business benefits for the organization. It is designed to establish huge brand value which is different and unique from its marker competi...

Read More arrow

ENL 1823B Memo For Vitality Of Contract Employment In Workplace

Download : 0 | Pages : 2
  • Course Code: ENL 1823B
  • University: Algonquin College
  • Country: Canada

Answer: To: All the HR employees From: HR department Date: 02-02-2019 Subject:  Contract Employment and its importance Hello everyone, Hope you all are doing fine! This is to inform you about the vitality of Contract Employment in workplace. You all might be well aware of the fact that the contract of employment is a very important document because it ensures regulation of all the terms and conditions of the very employment agreemen...

Read More arrow

MGT325 Managing Quality 2

Download : 0 | Pages : 3

Answer: Discuss a range of relevant approaches to quality management Royal Flying Doctor Service of Australia (RFDSA) is among the leading and most comprehensive aero-medical organizations globally. It provides primary and emergency health care amenities for people living in remote, rural and local areas of Australia (Australian Government: Department of Health, 2018). Royal Flying Doctor Service of Australia is a non-profit organisation...

Read More arrow
Next
watch

Save Time & improve Grades

Just share your requirements and get customized solutions on time.

question
We will use e-mail only for:

arrow Communication regarding your orders

arrow To send you invoices, and other billing info

arrow To provide you with information of offers and other benefits

1,245,154

Orders

4.9/5

Overall Rating

5,067

Experts

Our Amazing Features

delivery

On Time Delivery

Our writers make sure that all orders are submitted, prior to the deadline.

work

Plagiarism Free Work

Using reliable plagiarism detection software, Turnitin.com.We only provide customized 100 percent original papers.

time

24 X 7 Live Help

Feel free to contact our assignment writing services any time via phone, email or live chat.

subject

Services For All Subjects

Our writers can provide you professional writing assistance on any subject at any level.

price

Best Price Guarantee

Our best price guarantee ensures that the features we offer cannot be matched by any of the competitors.

Our Experts

Assignment writing guide
student rating student rating student rating student rating student rating 5/5

798 Order Completed

97% Response Time

Benjamin Blakeman

MSc in Medical Technology

London, United Kingdom

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 4/5

1309 Order Completed

100% Response Time

Gemmie Chen

MSc in Nursing

Singapore, Singapore

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

2830 Order Completed

97% Response Time

Leroy Bicknell

MBA in Marketing

London, United Kingdom

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

2632 Order Completed

100% Response Time

Albert Ambrosio

MSc in Nursing

London, United Kingdom

Hire Me

FREE Tools

plagiarism

Plagiarism Checker

Get all your documents checked for plagiarism or duplicacy with us.

essay

Essay Typer

Get different kinds of essays typed in minutes with clicks.

edit

GPA Calculator

Calculate your semester grades and cumulative GPa with our GPA Calculator.

referencing

Chemical Equation Balancer

Balance any chemical equation in minutes just by entering the formula.

calculator

Word Counter & Page Calculator

Calculate the number of words and number of pages of all your academic documents.

Refer Just 5 Friends to Earn More than $2000

Check your estimated earning as per your ability

1

1

1

Your Approx Earning

Live Review

Our Mission Client Satisfaction

Very fast and smooth service. The assignment I have received was highly satisfied.

flag

User Id: 218337 - 06 Apr 2020

Australia

student rating student rating student rating student rating student rating

it was grade homework and great time , I have a 5 point thanks , I will work with you always.

flag

User Id: 359586 - 06 Apr 2020

Australia

student rating student rating student rating student rating student rating

It was done very nicely and well before the deadline. I am very happy with the content and the expert

flag

User Id: 354422 - 06 Apr 2020

Australia

student rating student rating student rating student rating student rating

The work done was amazing! Helped me to get through my semester in flying colors. Worth every penny!

flag

User Id: 339159 - 06 Apr 2020

Australia

student rating student rating student rating student rating student rating
callback request mobile
Have any Query?