This question invites candidates to explain the meaning of the two rules relating to the payment for shares. Part (a) relating to payment at a premium carries 5 marks, as does part (b) which relates to payments at a discount.

(a) 
4–5 marks 
A good to complete explanation of what is meant by share premiums and how they are to be treated in law.
Reference must be made to the changed provisions of the Companies Act 2006.

2–3 marks 
Some idea about the issues but lacking in detail.

0–1 mark 
Very little, if any, understanding of the issues.

(b) 
4–5 marks 
Full understanding and explanation of the topic. It is likely that cases will be cited as authority although examples will be acceptable as an alternative.

2–3 marks 
Some knowledge of the topic but lacking in detail.

0–1 mark 
Little, if any, knowledge of the topic.