Please follow me for other PPT slide by using different reference of this subject in Nepali and English both medium. It is more helpful for you.

1. Class12: Account, Chapter2, Shares& ShareCapitalof a Company, Presentedby Pralhad Sapkota, PragatiSecondarySchool Hetauda– 9, Makawanpur, Nepal
Unit 1: Accounting for Companies:
Chapter 2: Shares & Share Capital of a company
sDkgLsf] z]o/ / z]o/ k'‘hL
 Learning Objective:
Upon completion of this chapter, student should
be able to
:Understand the meaning & types of share capital
:know the meaning & types of share

2. Class12: Account, Chapter2, Shares& ShareCapitalof a Company, Presentedby Pralhad Sapkota, PragatiSecondarySchool Hetauda– 9, Makawanpur, Nepal
2.1: Meaning of Share capital z]o/ k'‘hLsf] cy{
The capital of the company is divided into different parts called shares. Each part of the share
capital is called a share. The value, which is stated in share certificate, is called par value/face
value/nominal value/stated value. Total amount of all the shares is called share capital. The shares are
divided into definite value and numbers. Holders of these shares are called ‘shareholder’ or ‘member’ of
the company. It is an amount invested by the shareholders towards the nominal value of shares.
In other word “share capital is the ownership capital of a company raised by the issue of its
shares. It is an amount invested by the shareholders towards the nominal value of shares. A company
needs share capital in order to finance its activities.
sDkgLsf dflnsx¿n] nufgL u/]sf] k"FhLnfO{ z]o/ k"FhL elgG5 . ;+o'Qm k"FhL sDkgL ;~rfng ug{sf] nflu 7"nf] dfqfdf k"FhLsf]
cfjZostf kb{5 . o; k|sf/sf] k"FhL ;Íng ug{sf] nflu k"FhLnfO{ ; ;fgf efudf ljeflht u/L ljqmL ul/G5, h;nfO{ z]o/x¿ elgG5 .
sDkgLsf z]o/x¿ vl/b ug]{ JolQmnfO{ z]o/wgLx¿ elgG5, hf] sDkgLsf jf:tljs dflns x'g . sDkgLsf dflns cyf{t z]o/wgLx¿af6
;Íng ePsf] k"FhLnfO{ g} z]o/ k"FhL eGg] ul/G5 .
sDkgL ;~rfng ug{sf] nflu k|f/lDes sfo{x¿ k|jb{wsx¿ af6 ;DkGg x'G5 . k|jb{wsx¿n] sDkgLsf] btf{ u/L cfjZos kg]{
k"FhL ;Íng ug{ z]o/x¿ ljqmL ljt/0f u/fpg] sfo{ ub{5g .

3. Class12: Account, Chapter2, Shares& ShareCapitalof a Company, Presentedby Pralhad Sapkota, PragatiSecondarySchool Hetauda– 9, Makawanpur, Nepal
2.2: Types of Share capital z]o/ k'‘hLsf k|sf/x?
1. Authorized or registered or Nominal capital clws[t kF'hL jf btf{ k'FhL jf gfddfqsf] k'FhLM
The capital which is mentioned in the Memorandum of Association as the maximum amount of share capital
is called authorized or registered capital. It is the maximum amount of capital which a company can raise.
The capital is divided into definite number of shares. For example, if a company has 10,000 authorized
shares at the rate of Rs. 100 each, the total authorized share capital will be Rs. 10,00,000. The authorized
capital is also known as nominal capital. sDkgLsf] clwstd k'FhL olt;Dd x'g] egL sDkgL k|aGw kqdf pNn]lvt k'+hLnfO
cfws[t k'hL elgG5 . To;df pNn]lvt k'FhLeGbf a9L /sd sDkgLn] p7fpg kfpFb}g . To;}u/L sDkgLsf] btf{ ubf{ pNn]v ug'kg]{ ePsf]n]
o;nfO{ btf{ k'FhL elgPsf] xf] . pbfx/0fsf] nflu olb s'g} sDkgLsf] btf{ ubf{ !),))) z]o/ ?=!)) sf b/n] b]vfOof] eg] ;f] sDkgLsf] clws[t
k'FhL ?=!),)),))) x'G5 .
2. Issued capital lgisflzt jf hf/L k'FhLM
It is the part of the authorized capital, which is actually offered to the public for subscription. Generally, a
company does not issue the entire authorized shares at a time so that the issued capital is always less than
the authorized capital.(5,000 shares @ Rs.100 each). of] clws[t k'FhLsf] Tof] efu xf] h;nfO{ ;j{;fwf/0f ;fd' laqmL ug{sf]
nflu v'nf ul/Psf] x'G5 . ;Dk"0f{ clws[t k'FhLnfO{ g} lgisfzg ul/of] eg] clws[t k'FhL / lgisflzt k'FhL ;dfg x'g hfG5 . dflysf] pbfx/0fdf
;f] sDkgLn] !),))) z]o/dWo] %,))) z]o/ dfq ;j{;fwf/0fsf] nflu v'Nnf uof] eg] ?=%,)),))) -%,))) z]o/ ?= !)) sf b/n]_ lgisfl;t
k'FhL x'g hfG5 . t/ k"/} !),))) z]o/ ;j{;fwf/0fsf] nflu v'Nnf u/]df ?=!),)),))) g} hf/L k'FhL x'G5 .

4. Class12: Account, Chapter2, Shares& ShareCapitalof a Company, Presentedby Pralhad Sapkota, PragatiSecondarySchool Hetauda– 9, Makawanpur, Nepal
3. Subscribed capital cfj]lbt jf oflrt k'FhL M
It is that part of the issued capital, which is actually taken up by the investors. For example, if a company
issues 5,000 shares @ Rs. 100 each and the application for 4,500 shares were received, the subscribed
capital is Rs.4,50,000. sDkgLsf] lgisflzt k'FhL dWo] ;j{;fwf/0fn] vl/b ug{sf] nflu dfu u/]sf] jf cfj]bg lbPsf] k'FhLnfO{ oflrt
k'FhL elgG5 . dflysf] pbfx/0fdf lgisflzt k'FhL ?=%,)),))) dWo] ;j{;fwf/0faf6 ?= $,%),))) -$,%)) z]o/ ?=!)) sf] b/n]_ a/fa/sf]
z]o/ dfq vl/b ug{ lgj]bg k/]df ?= $,%),))) g} oflrt k'FhL x'g hfG5 .
4. Called-up capital dfu ul/Psf] k'FhL -/sd_M
The amount of share capital due on shares is normally collected from the shareholders in instalments at
different intervals. The called-up capital is that part of the nominal values of shares subscribed by
shareholders, which is requested by the company for payment. The uncalled capital if retained by the
company to be called up for the payment of creditors on liquidation is treated as reserve capital. cfj]lbt jf
oflrt k'FhLsf] Tof] efunfO{ dfu ul/Psf] k"FhL elgG5 h'g /sd sDkgLnfO{ tTsfn cfjZos kb{5 / p;n] z]o/ ;b:o;Fu dfu ub{5 .
sDkgLn] ;fdfGotof z]o/ ;b:ox¿af6 cfj]bg;fy z]o/sf] afF8kmfF8 ubf{ / To;kl5 klg k6s k6s u/L ls:tfaGbLdf z]o/sf] /sd dfu
ub{5 . dflysf] pbfx/0fdf sDkgLn] oflrt k'FhLdWo] ?=#,^),))) a/fa/sf] /sd z]o/ ;b:o;Fu tTsfn dfu uof]{ eg] ;f] ?=#,^),))) g}
dfu ul/Psf] k'FhL x'g hfG5 . afFsL ?=(),))) -?= $,%),))) - ?=#,^),)))_ dfu gul/Psf] k'FhL -Uncalled capital_ x'g hfG5 .
dfu gul/Psf] k'FhLnfO{ sDkgL lj36g ug]{ a]nfdf ;fx'nfO{ ltg{sf] nflu 56ofP/ klg /fVg ;lsG5 .

5. Class12: Account, Chapter2, Shares& ShareCapitalof a Company, Presentedby Pralhad Sapkota, PragatiSecondarySchool Hetauda– 9, Makawanpur, Nepal
5. Paid-up capital r'Qmf k'FhLM
It is the part of called-up capital, which has been actually received from the company’s
shareholders. If the called-up capital is 4,500 shares @Rs. 80 each and a shareholder
holding 100 shares fails to pay the second instalment of Rs. 20 per share, the paid-up
capital is Rs. 270,000 since Rs.90000 due on 4,500 shares at Rs. 20 per share failed
to pay.
r'Qmf k'FhL dfu k'FhLsf] Tof] efu xf] h;nfO{ sDkgLn] dfu]sf] avt z]o/ ;b:on] r'Qmf ub{5g . cyf{t
sDkgLn] dfu u/]sf] dWo] hlt /sd z]o/ ;b:on] sDkgLnfO{ ltb{5g To;nfO{ r'Qmf elgG5 . dflysf]
pbfx/0fdf sDkgLn] dfu u/]sf] ?=#^)),))) dWo] z]o/ ;b:on] s]jn ?=@&),))) sDkgLnfO{ lt/] eg]
;f]xL ?=@&),))) nfO{ g} r'Qmf k'FhL elgG5 . ltg{ afFsL ?=(),))) nfO{ p7g afFsL /sd -calls-in-
arrears_ elgG5.

6. Class12: Account, Chapter2, Shares& ShareCapitalof a Company, Presentedby Pralhad Sapkota, PragatiSecondarySchool Hetauda– 9, Makawanpur, Nepal
2.3: Meaning of Share
A share is a document that acknowledges the ownership of a company to the limit of the
amount contributed. So, the share is defined as an interest in the company reflecting the
ownership thereof and entitling to receive profit proportionately. The share capital of a
company is divided into fixed number of units, and each such unit is called share. Therefore, a
share can be defined as a unit of share capital reflecting the extent of interest of a
shareholder.
z]o/ eGgfn] To:tf] :jfldTj k|n]vnfO{ hgfpFb5 h'g sDkgLn] k'FhL ;+sng ug{sf] nflu hf/L u/]sf]
x'G5 . sDkgLsf] k'FhLnfO{ ;dfg d"Nosf] cfwf/df ljeflht ul/Psf] k|To]s c+znfO{ z]o/ elgG5 . s'g}
klg JolQmn] sDkgLsf] z]o/ vl/b laqmL ug{ ;Sb5 / vl/b laqmLsf] dfWodåf/f pQm z]o/dflysf]
:jfldTjnfO{ x:tfGt/0f ug{ ;Sb5 . s'g} klg JolQmn] pQm z]o/ vl/b u/]afkt sDkgLsf] gfkmfdf
;xefuL x'g kfpg] s'/fsf] clwsf/ /fVb5 .

7. Class12: Account, Chapter2, Shares& ShareCapitalof a Company, Presentedby Pralhad Sapkota, PragatiSecondarySchool Hetauda– 9, Makawanpur, Nepal
2.4: Types of Shares
1. Equity / Ordinary shares ;fwf/0f z]o/M
Equity shares are those, which will get dividend and refund of capital only after preference shareholders
are paid. Equity shares are also known as ordinary shares or common shares. There is no fixed rate of
equity dividend. The dividend on these shares is paid from profits only after paying interest on debentures
and dividends on preference share capital. Equity shareholders can participate in management and enjoy
the voting rights to elect some members of Board of Directors. Equity shareholders are the real owner of
the business.
;fwf/0f z]o/ tL z]o/ h;sf] laqmL lat/0faf6 sDkgLn] cfˆgf] d"n k"FhL ;+Íng ub{5 / h;sf] wf/snfO{ ;dfg clwsf/ k|fKt x'G5 To:tf
z]o/nfO{ ;dtf jf ;fwf/0f z]o/ elgG5 . o:tf] z]o/df nfef+z ljt/0f ug]{ b/ klxn] g} lglZrt x'Fb}g . C0fkqdf Aofh tyf k"jf{lwsf/
z]o/df nfef+z k|bfg u/L gfkmf afFsL /x]df dfq o:tf z]o/nfO{ nfef+z ljt/0f ug{ ;lsG5 . To:t} sDkgL lj36g x'Fbf ;DklQsf] laqmLaf6
k|fKt /sdaf6 klxn] laleGg ;fx'nfO{, To;kl5 k"jf{lwsf/ z]o/wgLx¿nfO{ e'QmfgL u/]/ afFsL /x]df dfq ;fwf/0f z]o/wgLnfO{ /sd lkmtf{
ul/G5 . t/, ;fwf/0f z]o/wgL sDkgLsf jf:tljs dflns x'G5g / pgLx¿n] dfq ;~rfns ;ldlt rog ug{ cfkm' pDd]bjf/ aGg / ef]6
xfNg kfpF5g . To;}u/L, sDkgLsf] ;fwf/0f ;efx¿df ;lqmo ¿kn] ;xefuL x'g kfpF5g .

8. Class12: Account, Chapter2, Shares& ShareCapitalof a Company, Presentedby Pralhad Sapkota, PragatiSecondarySchool Hetauda– 9, Makawanpur, Nepal
The importance of equity share capital are as follows: ;fwf/0f z]o/sf] dxTj
i. Importance to the company sDkgLsf] nflu dxTj M
 No need to pay dividend, in case of loss of the company sDkgL 3f6fdf uPdf nfef+z lbg gkg]{ .
 No need to refund to the equity shareholders before winding-up of the company.sDkgLsf] lj36g x'g]
cj:yfdf afx]s ;fwf/0f z]o/sf] /sd lkmtf{ ug{ gkg]{ h;n] ubf{ ;fwf/0f z]o/sf] /sdnfO{ sDkgLn] :yfoL ¿kn] k|of]u ug{ kfpFb5 .
 The directors are elected from the equity shareholders for the effective management of the company.
;fwf/0f z]o/ ;b:ox¿af6 lgjf{lrt eP/ ;~rfns ;ldlt aGg] x'Fbf sDkgLsf] Joj:yfkg k|efjsf/L x'G5 .
ii) Importance to the shareholders z]o/ ;b:osf] nflu dxTj
 Every shareholder has a voting right to elect the company’s BOD. sDkgLsf k|To]s ;fwf/0f z]o/wgLnfO{
sDkgLsf] ;+rfns ;ldltsf] pDd]åf/ x'g] / To;sf] lgjf{rgdf ef]6 xfNg] clwsf/ k|fKt x'G5 .
 Equity shareholders can enjoy a higher amount of dividend in case of a higher profit. olb sDkgLn] a9L
gfkmfdf cfh{g u/]sf] cj:yfdf eg] ;fwf/0f z]o/wgLn] a9L nfef+z k|fKt ug{ ;Sb5g .
 Equity shareholders can easily sell or transfer their shares to others. ;fwf/0f z]o/wgLn] cfkm"n] rfx]sf] a]nfdf
cfˆgf] z]o/nfO{ ;lhn};Fu x:tfGt/0f jf laqmL ;Sb5g .

9. Class12: Account, Chapter2, Shares& ShareCapitalof a Company, Presentedby Pralhad Sapkota, PragatiSecondarySchool Hetauda– 9, Makawanpur, Nepal
2. Preference shares k"jf{lwsf/ z]o/M
Preference shares are those shares that are entitled to certain privileges. The dividend on
preference share is paid at a fixed rate. The dividend on such shares is paid before any dividend
is paid to equity shareholders. Similarly, at the time of winding-up the company, the preference
capital is repaid before such a repayment is made to the equity shareholders. Preference
shareholders do not have any voting rights.
;fwf/0f z]o/sf] t'ngfdf laz]if ;'ljwf jf k|fyldstf k|fKt z]o/nfO{ k"jf{lwsf/ z]o/ elgG5 . sDkgLn] cfh{g u/]sf]
gfkmfaf6 nfef+z kfpg] klxnf] clwsf/ tyf sDkgLsf] ;dfkgsf] cj:yfdf k'FhL lkmtf{ kfpg] cu|flwsf/ ePsf]n] o:tf z]o/nfO{
k"jf{lwsf/ z]o/ elgPsf] xf] . o:tf z]o/sf] nfef+zsf] b/ lgisfzgs} ;dodf g} lglZrt ePsf] x'G5 eg] k"jf{lwsf/ z]o/wgLnfO{
;~rfns ;ldltsf] rogdf dtflwsf/ eg] x'Fb}g .

10. Class12: Account, Chapter2, Shares& ShareCapitalof a Company, Presentedby Pralhad Sapkota, PragatiSecondarySchool Hetauda– 9, Makawanpur, Nepal
Types of preference shares are as follows:
i. Cumulative preference share ;~roL k"jf{lwsf/ z]o/M
Cumulative preference shares are those shares on which the amount of unpaid dividends is
accumulated and is carried forward as a liability. ;~roL k"jf{lwsf/ z]o/ eg]sf] Tof] z]o/ xf] h;n] k|To]s jif{ kfpg'kg]{
nfef+z s'g} jif{ k|fKt gePdf To;nfO{ ;lGrt u/L sDkgLsf] bfloTjsf] ¿kdf cfufdL jif{x¿df ;fb}{ nluG5 . kl5, s'g} jif{sf]
gfkmfaf6 ltg{ k'u]df ;a} ;l~rt ePsf] ;Dk"0f{ nfef+z /sd z]o/wgLnfO{ e'QmfgL ul/G5 .
ii. Non-cumulative preference share c;~roL k"jf{lwsf/ z]o/M
They are those shares on which the arrears of dividend do not accumulate. s'g} jif{df gfkmf gePsf] jf sd
ePsf] sf/0fn] ltg{ g;lsPsf] nfef+z ;+lrt u/L cfufdL jif{x¿df ;fl/b}g eg] To:tf k"jf{lwsf/ z]o/nfO{ c;+roL k"jf{lwsf/ z]o/
elgG5 . o:tf z]o/n] 3f6f ePsf] jif{sf] nfef+z k|fKt ug{ ;Sb}g .
iii. Redeemable preference share ;f]Wo k"j{lwsf/ z]o/M
They are those shares that can be redeemed within a specific period of time. The terms and conditions
for redemption of preference shares need to be specified at the time of the issue of shares. lglZrt
;dofjlwkl5 lkmtf{ ug]{ u/L lgisfzg ul/g] k"jf{lwsf/ z]o/nfO{ of]Wo k"jf{lwsf/ z]o/ elgG5 . o:tf z]o/nfO{ s;/L lkmtf{ ug]{ eGg]
s'/fx¿ of] z]o/ lgisfzg ug]{ a]nfdf g} tf]lsPsf] x'G5 .

11. Class12: Account, Chapter2, Shares& ShareCapitalof a Company, Presentedby Pralhad Sapkota, PragatiSecondarySchool Hetauda– 9, Makawanpur, Nepal
iv. Irredeemable preference share c;f]Wo k"jf{lwsf/ z]o/M
They are those, which can be redeemed only at the time of liquidation of the company. sDkgLsf]
lj36g ug]{ a]nfdf dfq k'FhL lkmtf{ ug]{ u/L hf/L ul/Psf] k"jf{lwsf/ z]o/nfO{ c;f]Wo k"jf{lwsf/ z]o/ elgG5 .
v. Convertible preference share kl/jt{gLo k"jf{lwsf/ z]o/M
They are those shares, which can be converted into equity shares. The conversion becomes
possible when the company provides such option. z]o/ lgisfzg ug]{ ;dodf g} o:tf z]o/nfO{ s]xL
;dokl5 ;fwf/0f z]o/df kl/jt{g ug{ ;lsg] 5 eGg] zt{ /fvL lgisfzg ul/g] k"jf{lwsf/ z]o/nfO{ kl/jt{gLo k"jf{lwsf/
z]o/ elgG5 . ;fwf/0ftof z]o/ ;b:on] rfx]df dfq o:tf z]o/nfO{ ;fwf/0f z]o/df kl/jt{g ug{ ;lsG5 .
vi. Non-convertible preference share ckl/jt{gLo k"jf{lwsf/ z]o/M
They are those shares, which can not be converted into equity shares. Preference share are
non-convertible unless otherwise stated. ckl/jt{gLo k"jf{lwsf/ z]o/M h'g k"jf{lwsf/ z]o/nfO{ ;fwf/0f z]o/df
kl/jt{g ug{ ;lsb}g To:tf z]o/nfO{ ckl/jt{gLo k"jf{lwsf/ z]o/ elgG5 ;fdfGotofM k"jf{lwsf/ z]o/ eGgfn] ckl/jt{gLo
k"jf{lwsf/ z]o/ eGg] a'lemG5 .

12. Class12: Account, Chapter2, Shares& ShareCapitalof a Company, Presentedby Pralhad Sapkota, PragatiSecondarySchool Hetauda– 9, Makawanpur, Nepal
vii. Participating preference share ;xefuL k"jf{lwsf/ z]o/M
They are those shares, which have the right to participate in any surplus profit of the company
after paying dividend on equity shareholder. klxn] k"j{ lglZrt b/df k"jf{lwsf/ z]o/nfO{ nfef+z ljt/0f
ul/;s]kl5 afFsL gfkmfdf k'gM ;xefuL x'g kfpg] k"jf{lwsf/ z]o/nfO ;xefuL k"jf{lwsf/ z]o/ elgG5 .
viii. Non-participating preference share c;xefuL k"jf{lwsf/ z]o/M
They are those share, which do not carry such rights. If the Article of Association of the
company is silent, preference shares are assumed to be non-participating preference share.
klxn] tf]lsPsf] b/df nfefz k|fKt ul/;s]kl5 k'gM afFsL gfkmfdf ;xefuL xg gkfpg] k"jf{lwsf/ z]o/nfO{ c;xefuL
k"jf{lwsf/ z]o/ elgG5 . sDkgLsf] lgodfjnL df}g 5 eg] s'g} klg sDkgLsf k"jf{lwsf/ z]o/x¿ c;xefuL x'G5g eGg]
dflgG5 .

13. Class12: Account, Chapter2, Shares& ShareCapitalof a Company, Presentedby Pralhad Sapkota, PragatiSecondarySchool Hetauda– 9, Makawanpur, Nepal
Basis Equity share Preference share
1.Dividend Dividend on equity share is paid after the
payment of preference dividend.
Dividend on preference share is paid before the payment
of equity share.
2.Rate of
dividend
Rate of dividend on equity share may vary from
year to year. / is not fixed.
Rate of dividend on preference share is fixed.
3. Arrears of
dividend
Arrears of dividend cannot be accumulated in
any case
Arrears of dividend may be accumulated in case of
cumulative preference share
4. Refund of
capital
In case of dissolution of the company, equity
share capital is refunded after the repayment of
preference share capital.
In case of dissolution of the company, preference share is
refunded before the repayment of equity share capital.
5. conversion It cannot be convertible. It may be convertible.
6.Voting Right Equity shareholder enjoys voting rights. Preference shareholders do not have voting rights.
Differentiate between equity shares and preference shares on their features

14. Class12: Account, Chapter2, Shares& ShareCapitalof a Company, Presentedby Pralhad Sapkota, PragatiSecondarySchool Hetauda– 9, Makawanpur, Nepal

15. Class12: Account, Chapter2, Shares& ShareCapitalof a Company, Presentedby Pralhad Sapkota, PragatiSecondarySchool Hetauda– 9, Makawanpur, Nepal
3. Right shares clwsf/ z]o/M
The shares entitling to be subscribed by the existing shareholders of the company are called right
shares. These are additional equity or common shares offered by a company of its shareholders to
subscribe within a specified period at a specific price.
sDkgLsf df}h'bf z]o/wgLx¿åf/f oflrt tyf sDkgLåf/f lgisfl;t z]o/nfO{ …clwsf/ z]o/Ú elgG5 . of] z]o/ 5'§} lsl;dsf] z]o/
geP/ sDkgLn] cfˆgf ;b:ox¿nfO{ dfq laqmL ug]{ u/L hf/L ePsf ;fwf/0f z]o/ g} x'g . o:tf z]o/x¿ ;j{;fwf/0fnfO{ laqmL ul/b}g .
4. Deferred share l8km8{ z]o/M
The share allotted to the promoters as a token of reward for the company is called deferred shares.
Founders or management shares are the other terms which are used to refers such shares.
Defferred shares enjoy rights to share on profit after paying off preference dividend and equity dividend.
sDkgLsf ;+:yfksx¿nfO{ sDkgL :yfkgf u/]sf] k'/:sf/:j¿k l;Q}df lbOg] z]o/nfO{ Deferred share elgG5 . o:tf z]o/nfO{ Founders cyjf
Management z]o/ klg elgG5 . k"jf{lwsf/ z]o/ / ;fwf/0f z]o/nfO{ nfef+z afFl8;s]kl5 dfq afFsL gfkmfaf6 dfq o:tf z]o/wgL nfO{ nfef+z
afFl8G5 .