Question 4a
Marking Guide

This question requires candidates to consider the linked concepts of capital maintenance and the payment for shares.

(a) 
Requires an explanation of the overall concept of capital maintenance.
2 marks Clear answer providing explanation of the creditor fund and the way in which a company’s capital may be used and may not be used. Reference may be made to limited liability and examples of the operation of the doctrine may be provided.
1 mark Some knowledge of the concept but lacking any depth or explanation. Perhaps merely a reference to the idea of the creditor fund.
0 marks No knowledge of the topic.
Part (b) relating to payment at a premium carries 4 marks, as does part (c) which relates to payments at a discount.

We use cookies to help make our website better. We'll assume you're OK with this if you continue. You can change your Cookie Settings any time.

Cookie SettingsAccept