(a). (i) Shares mean the interests of members of a body corporate who are entitled to share in the capital or income of the body corporate. The shares of any member in a company are personal estate and shall not be in the nature of real estate or immovable property – Section 42 of Act 179. Equity shares are of no par value; one share, one vote, etc. The rewards on equity shares are varied dividends proposed by directors and approved at AGM and capital appreciation of the shares. Equity shares entitle the owner to voting rights, participating in AGM/EGM, etc. Shareholders are the ‘owners’ of the company and are residual claimants to the assets of the company upon winding up.

(ii) Debenture is a written acknowledgment of indebtedness by the company setting out the terms and conditions of a loan – sec 83 of Act 992. It is a financial instrument used by a company to raise debt/loan capital. Debenture could be a series of debentures or debenture stock. Debentures could be convertible, perpetual, secured, or naked. Debenture holders are not members of the company and have no right to attend AGM or vote. Their relationship with the company is contractual as contained in the instrument. They are entitled to interest payments on the loan amount.

(iii) Floating charge is an equitable charge over the whole or specific part of the company’s undertaking and assets, both present and future. The company deals with the assets until the charge crystallizes and becomes enforceable, the court appoints a receiver on an application of the holder, or the company goes into liquidation. Sec 90 of Act 992. Crystallization of the security implies the charge becomes a fixed equitable charge on the affected assets. Floating charge can be created on stocks, debtors, etc.

(iv) Liquidity of a share is the ease with which the company’s share is saleable / convertible into cash. Shareholders of public companies must have no impediment on their ability to trade/sell their shares unless provided for by law. This is made possible through the Ghana Stock Exchange, for instance, where the shares are traded in the secondary market, and the prices are determined by demand and supply of the particular share.

(b). Sec 55 & 56 of Act 992:

• The company shall deliver to the registered holder a share certificate under its common seal within two months after issue or registration of transfer of share.
• The share certificate shall indicate:
  • The number and class of shares, and the definitive number thereof, if any.
  • Amount paid, and unpaid on the shares, if any.
  • Name and address of the registered holder.
• Statements made in a share certificate shall be prima facie evidence of title to the person named in it as the registered holder and the amounts paid and payable.
• The company is estopped from denying the accuracy of statements in the share certificate and must compensate persons who made changes to their positions relying on the certificate in good faith and suffered loss.
• The company can call upon the other person for indemnity.