CTM00511 - Introductory: meaning of ordinary share capital: general
This guidance considers what is meant by 바카라 사이트渙rdinary share capital바카라 사이트� and replaces R&C Brief 87/09聽published January 2010 also formerly reproduced as CG Manual Appendix 11. That R&C Brief, which succeeded R&C Brief 54/07, was largely focused on whether the balance sheets of foreign entities reflect ordinary share capital or amounts closely analogous to ordinary share capital.聽 This is now dealt with at CTM00515 and CTM00516. 聽CTM00512 considers what is meant by 바카라 사이트渟hare capital바카라 사이트�, CTM00513 what is meant by 바카라 사이트渟hares바카라 사이트�, and CTM00514 the meaning of 바카라 사이트渙rdinary shares바카라 사이트�.
The relevant definitions, for the purposes of the Income Tax Acts at ITA07/S989, and for the purposes of the Corporation Tax Acts at CTA10/S1119, are identical:
바카라 사이트淥rdinary share capital, in relation to a company, means all the company바카라 사이트檚 issued share capital (however described), other than capital the holders of which have a right to a dividend at a fixed rate but have no other right to share in the company's profits.바카라 사이트�
The equivalent definition under company law, found at CA06/S548 is of 바카라 사이트渆quity share capital바카라 사이트� and reads
바카라 사이트淚n the Companies Acts 바카라 사이트渆quity share capital바카라 사이트�, in relation to a company, means its issued share capital excluding any part of that capital that, neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution.바카라 사이트�
The tax and company law definitions are quite similar in effect; 바카라 사이트渄istribution바카라 사이트� under company law is defined at CA06/S829 in terms that include 바카라 사이트渆very description of distribution of a company바카라 사이트檚 assets to its members, whether in cash or otherwise바카라 사이트� but excludes capital operations such as bonus (capitalisation) issues, capital reductions, redemptions or purchases of shares out of capital and distributions in a winding-up.
The Corporation Tax definition of 바카라 사이트渄istribution바카라 사이트� at CTA10/PART23 is somewhat broader.聽 It reflects anti-avoidance provisions, aimed for example at certain interest payments which have the character of profit distributions, and covers some capital operations.聽 But the tax definition above focuses on 바카라 사이트渄ividends바카라 사이트�.
See CTM00514 regarding certain special definitions of ordinary share capital.
Types of share capital
The reference in the tax definition to 바카라 사이트渉owever described바카라 사이트� reflects the fact that commercial practice employs a variety of descriptions of types of share capital which broadly describe their characteristics but are not definitive without reference to the articles or other constitutional documents of the issuing company.聽 Examples are deferred ordinary shares; participating preferred ordinary shares; participating preference shares.聽 Sometimes shares will be labelled 바카라 사이트渘on-voting바카라 사이트�, 바카라 사이트渞edeemable바카라 사이트�, 바카라 사이트渃umulative바카라 사이트� or 바카라 사이트渃onvertible바카라 사이트�.聽 These are helpful pointers, but the articles must always be consulted.
Member and shareholder
Member and shareholder do not always mean the same thing, though usually they do.聽 A member is one of the owners of a company (or whatever nature) whose name has been entered on the register of members. Members delegate various powers to the company바카라 사이트檚 directors to run the company on their behalf.
A shareholder is a person who subscribes for or buys and holds shares in a company having a share capital, who becomes a member once their name is entered on the register of members. Companies limited by guarantee do not have a share capital, save for some historical exceptions (see CTM00512) and consequently their members are not shareholders but guarantor owners.
Whether an overseas-registered entity is treated as being a company in the first instance depends on whether or not it is treated as being 바카라 사이트渢ransparent바카라 사이트� for tax purposes.聽 This aspect is dealt with in the International Manual at INTM180010 onwards.