How companies raise money through shares and borrowing, and the statutory framework that governs allotment, dividends, security and the lender's position when things go wrong.
Every decision to issue shares or take on debt brings its own statutory machinery, and the two strands collide when a company fails. This chapter begins with the basic division between equity and debt funding and the main forms each can take, then works through the share capital rules: directors' authority to allot, statutory pre-emption rights, redeemable shares, lawful dividends and the prohibition on financial assistance. It then turns to secured lending — the distinction between fixed and floating charges, registration at Companies House, a liquidator's power to avoid charges and the order of priority on insolvent liquidation — along with negative pledge clauses, events of default and the formalities for guarantees. It closes with how directors' duties shift as insolvency approaches and the personal consequences of wrongful trading.
