706.The first step in a calculation of an equity holder’s proportion of profits available for distribution is based on the equity holder’s share holding (see section 165). The equivalent first step in the calculation of an equity holder’s proportion of assets available for distribution in a winding up is in section 166.
707.The next step is to check whether there is a (lower) alternative proportion in accordance with the three special rules in:
section 170 (limited rights);
section 172 (temporary rights); or
section 174 (options).
708.If only one of the special rules applies the lower alternative proportion is used. But sections 175 to 178 explain what happens if two or three of the special rules apply in the same case.
709.If two rules apply, there are four possible proportions:
calculated under the basic rule in section 165 or 166;
calculated under one of the special rules;
calculated under the other of the special rules; or
calculated under both rules together.
710.If all three rules apply, there are eight possible proportions.
711.In all cases, the lowest proportion is used.