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CMA Final · Corporate Financial Reporting · Internal Reconstruction (Capital Reduction)

Under section 66(7), after a reduction, a past or present member's liability on a share is limited to:

A member's liability is capped at the difference between the amount paid or deemed paid on the share and the share's amount fixed by the reduction order. It is not the old nominal value or market price, and is not necessarily nil.

  1. AThe difference, if any, between the amount paid or deemed paid on the share and the amount of the share as fixed by the order of reductionCorrect
  2. BThe original nominal value of the share before reduction
  3. CThe market price of the share on the date of the order
  4. DNil in all cases

Explanation

Section 66(7) provides that a member shall not be liable to any call exceeding the difference between the amount paid, or reduced amount deemed paid, and the amount of the share as fixed by the order of reduction. It does not revert to the old nominal value, and it is not nil where unpaid amounts remain.

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