SHARE CAPITAL SHARE

DEBENTURE

DEFINITION-CAPITAL/SHARE CAPITAL TYPES OF SHARE-CAPITAL

Capital is the amount invested in the company so that it can carry

on its activities

Total capital is divided into a number of small units of fixed amount and each such unit is called a share So the capital of the company is called

SHARE CAPITAL

 The first company that issued shares was the Dutch East India Company in 1602

A company cannot issue share capital in excess of the limit specified in the Capital clause without altering the capital clause of the MoA

Nominal/Authorised/Registered capital The maximum amount of share capital which a company is authorised to issue as per its Memorandum of Association

Issued capital Issued capital is that part of the authorised capital which the company offers to public

Subscribed capital

That part of the issued capital at nominal or face value which has been subscribed or taken up by purchaser of shares in the company and which has been alloted

Called up capital It is that part of the issued/subscribed capital which is called up by company to pay on the allotted shares and is to be paid by the shareholders.

if the face value of a share is Rs. 10/- but the company requires only Rs. 2/- at present, it may call only Rs. 2/- now and the balance Rs.8/- at a later date. Rs. 2/- is the called up share capital and Rs. 8/- is the uncalled share capital.

Paid-up capital means the total amount of called up share capital which is actually paid to the company by the members

Paid up capital

Reserve capital Company may keep some part of its share capital uncalled and kept in reserve, to be called only in case of need at the time of its winding up
Un Reserved capital Reserved capital

Why Do Companies Issue Shares? Why Do Investors Buy Shares? Companies issue shares to raise money/capital from investors. This money is used for the development and growth of businesses of companies.

Share certificate

Par value of shares means the face value of the shares. A share can of any value which may be fixed by the MoA of the company. When the shares are issued at the price which is higher than the par value say, for example Par value is Rs10 and it is issued at Rs15 then Rs5 is the premium amount i.e, Rs10 is the par value of the shares and Rs5 is the premium. Similarly when a share is issued at an amount lower than the par value, say Rs8, in that case Rs2 is discount on shares and Rs10 will be par value

PAR VALUE OF SHARES

PREMIUM SHARES DISCOUNT SHARES

Transfer of shares is a voluntary act of members and it is the method of transferring the ownership rights of the shares from one person to another.

In a public company directors may refuse to transfer shares if transfer deed is, for any reason, defective or invalid.

Transfer of shares is a voluntary act of members and it is the method of transferring the ownership rights of the shares from one person to another.

In a pvt co. Shares are freely transferable unless the companys articles impose restrictions on transfers.

In a pvt co. Shares are freely transferable unless the companys articles impose restrictions on transfers. Usually the Articles empower the directors to reject transfer of shares on the following grounds:

(a) where partly paid up shares are to be transferred to a pauper or a minor; (b) where the transferee is person of unsound mind; (e) where there is a personal animosity between the directors and the proposed transferee or the transferee would harass the management; (f) where the instrument of transfer contains some apparent irregularity, e.g., not signed or stamped properly.

Transmission of shares is the result of operation of Law and it takes place only on the death, insolvency or lunacy of the share holder.

Transfer 1. By a deliberate act. 2. Requires the execution of formal instrument of transfer. 3. There must be adequate consideration. 4. Stamp duty is payable.

Transmission
1. By the operation of law. 2. Requires an evidence showing the legal entitlement. 3. There is no question of consideration. 4. Stamp duty is not payable..

Dividends are returns paid to shareholders out of the profits of the company. Returns can be in the form of cash or additional shares of the company called bonus shares. Dividends are usually paid once or twice a year depending upon the companys profit distribution policy