Ordinary shares
Ordinary shares:
- generally comprise the bulk of a company's equity capital, that is, shareholder's funds, and
- have a nominal or par value, commonly 25c, 50c or $1.00, which is required by laws governing the formation of companies.
More →More → (go back)
How ordinary shares are assessed
9.5.5/Deemed Income from Listed Securities, Derivative Investments & Foreign Shareholdings
The par value does not necessarily mean that:
- shares are issued for this amount, or
- the subsequent trading price will be close to par value.
Contributing or partly paid shares
Contributing (or partly paid) shares may be issued where a company does not require full payment to meet its immediate capital requirements, but will need the extra funds to meet future commitments. When all payments are made on partly paid shares they will be converted to fully paid shares.
Assessment of contributing or partly paid shares
9.5.5/Deemed Income from Listed Securities, Derivative Investments & Foreign Shareholdings
Deferred dividend shares
Deferred dividend shares are issued with the stipulation that dividends will not be paid until a specified period has elapsed.
Assessment of contributing or partly paid shares
9.5.5/Deemed Income from Listed Securities, Derivative Investments & Foreign Shareholdings
Preference shares
Preference shares entitle the shareholder to:
- dividend payments as first claim on the profits of a company, and
- priority over ordinary shareholders to repayment of invested capital in the event that the company is wound up.
More →More → (go back)
Assessment of preference shares
9.5.5/Deemed Income from Listed Securities, Derivative Investments & Foreign Shareholdings
Company options
Shareholders with company options can subscribe to new shares, on a nominated date, by paying an agreed or 'exercise' price. The following information applies to company options:
- there may be a small initial outlay to purchase the option,
- there is no obligation to exercise the option, which will lapse if not taken up by the expiry date,
- options in listed companies may be bought and sold on the exchange, and
- the value of an option should be obtained from market reports in the Australian Financial Review and other newspapers.
More →More → (go back)
Assessment of company options
9.5.5/Deemed Income from Listed Securities, Derivative Investments & Foreign Shareholdings
Convertible, non-convertible and capital notes
The following table describes convertible, non-convertible and capital notes:
Assessment of convertible, non-convertible and capital notes
9.5.5/Deemed Income from Listed Securities, Derivative Investments & Foreign Shareholdings
|
Note |
Description |
|
Convertible notes |
Are similar to loan investments as they have a:
They are included among equity investments because, at a specified date, they are convertible to ordinary shares either:
|
|
Non-convertible notes and capital notes |
Have a fixed interest rate, but are not convertible to ordinary shares. |