BCL – L1 – SA – Q66 – Types of Capital

How a share certificate binds a company.

Question

A share certificate once issued by the company binds it in two ways, namely by estoppel as to payment. and by estoppel as to?

A title

B profit

C dividend

D none

Answer

Explanation:
The correct answer is A because a share certificate binds the company by estoppel as to payment (confirming shares are paid up) and as to title (confirming the holder’s ownership). This prevents the company from denying these facts. Profit (B) and dividend (C) are unrelated to estoppel, and D is incorrect as A is valid.

Tags: Company Law, Estoppel, Share Certificate
Level: Level 1

Topic: Types of capital and the financing of companies

Uploader: Samuel Duah