Fractional Shares

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    155. Fractions of shares.

    A corporation may, but shall not be required to, issue fractions of a

    share. If it does not issue fractions of a share, it shall (1) arrange for the

    disposition of fractional interests by those entitled thereto, (2) pay in

    cash the fair value of fractions of a share as of the time when those

    entitled to receive such fractions are determined or (3) issue scrip or

    warrants in registered form (either represented by a certificate oruncertificated) or in bearer form (represented by a certificate) which

    shall entitle the holder to receive a full share upon the surrender of

    such scrip or warrants aggregating a full share. A certificate for a

    fractional share or an uncertificated fractional share shall, but scrip or

    warrants shall not unless otherwise provided therein, entitle the holder

    to exercise voting rights, to receive dividends thereon and to

    participate in any of the assets of the corporation in the event of

    liquidation. The board of directors may cause scrip or warrants to be

    issued subject to the conditions that they shall become void if not

    exchanged for certificates representing the full shares or uncertificated

    full shares before a specified date, or subject to the conditions that the

    shares for which scrip or warrants are exchangeable may be sold by the

    corporation and the proceeds thereof distributed to the holders of scrip

    or warrants, or subject to any other conditions which the board of

    directors may impose.-

    http://delcode.delaware.gov/title8/c001/sc05/

    Section 41. Power to acquire own shares.- A stock corporation shall have the

    power to purchase or acquire its own shares for a legitimate corporatepurpose or purposes, including but not limited to the following cases:

    Provided, That the corporation has unrestricted retained earnings in its books

    to cover the shares to be purchased or acquired:

    1. To eliminate fractional shares arising out of stock dividends;

    2. To collect or compromise an indebtedness to the corporation, arising out of

    unpaid subscription, in a delinquency sale, and to purchase delinquent shares

    sold during said sale; and

    3. To pay dissenting or withdrawing stockholders entitled to payment for

    their shares under the provisions of this Code. (a) - Corporation Code of the

    Philippines

    http://delcode.delaware.gov/title8/c001/sc05/http://delcode.delaware.gov/title8/c001/sc05/http://delcode.delaware.gov/title8/c001/sc05/
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    Definition of 'Fractional Share'

    A share of equity that is less than one full share. Fractional shares usually

    come about from stock splits, dividend reinvestment plans (DRIPs) and

    similar corporate actions. Normally, fractional shares cannot be acquired from

    the market.

    Investopedia explains 'Fractional Share'

    Fractional shares can be created in a situation where a company has a 3-for-2

    stock split. Suppose you have three shares of XYZ Corp. and XYZ has a 3-for-2

    stock split. In this case, you should get an extra 1.5 shares, which would be 4.5

    shares total. Normally, you can't buy half a share in the stock market, but in

    this case, you could end up with a fractional share.

    Most companies tend to round up to the nearest whole number of shares

    when fractional shares occur. In the above example, XYZ Corp. could opt to

    round up the 0.5 share to leave you with a full five shares. -

    http://www.investopedia.com/terms/f/fractionalshare.asp

    Contact:

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    Email: [email protected]

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