Corporate Accounting Issue of Shares
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This document discusses share capital and the issue of shares in a joint stock company. It defines a joint stock company as an association of individuals in a business enterprise with transferable shares of stock, similar to a corporation but with stockholders liable for business debts. Share capital refers to the total amount raised by a company through the sale of common or preferred stock, represented by the total nominal value of shares issued. The document outlines the types of share capital including authorized, registered, issued, subscribed, called up, and paid up capital. It also defines shares and lists the main types as common and preferred shares. The procedures for issuing shares are described as issue of prospectus, receipt of applications, allotment, and calls.
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The document outlines several ways that a company can issue shares, including:
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- A bonus issue distributes a company's retained earnings to shareholders in the form of additional shares rather than cash. It does not change the inherent value of the shares.
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The document outlines several ways that a company can issue shares, including:
1) Private placement of shares to friends and relatives without a public offering.
2) Preferential allotment, where a listed company issues bulk shares to a select group to raise capital.
3) Right issues, where existing shareholders can purchase additional shares at a discount.
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The document proposes restructuring Fannie Mae and Freddie Mac to reduce their high leverage. It suggests:
- Extinguishing common/preferred equity and exchanging subordinated debt for equity warrants.
- Holders of senior unsecured debt would receive 90% in new senior debt and 10% in new common equity.
- The US government would commit to purchasing new common stock at initial value for three years.
- The restructuring would create a "fortress balance sheet" with lower leverage ratios and more equity.
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The document discusses key differences between private and public companies. It states that private companies have restrictions on the number of members and cannot invite the public to subscribe to its shares, while public companies can have an unlimited number of members and can invite public subscription. Additionally, private companies have restrictions on the transfer of shares while public companies do not.
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- Infosys announced a 1:1 bonus share issue, meaning for every existing share held, investors will receive an additional share. This will effectively double the number of shares held.
- A bonus issue distributes a company's retained earnings to shareholders in the form of additional shares rather than cash. It does not change the inherent value of the shares.
- When the bonus shares are distributed, the stock price will adjust downward on the ex-bonus date to account for the increased number of shares outstanding. Earnings per share will also decrease as a result of the bonus issue.
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Stocks and bonds are two separate ways for a company to raise money in order to fund and expand their company’s operations. While issuing stocks a company is selling a piece of their company in exchange for money. Whenever a company issues a bond, it is issuing debt with an agreement to pay interest for the use of the money.
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Long Term Financing
Long term financing provides capital for periods over one year through equity like stock issuances or debt. It is used to finance fixed assets, permanent working capital needs, expansions, and large construction projects. Common stock represents ownership in a company and allows for transfer of shares. While stocks provide growth potential, the original investment is at risk and returns depend on company performance. Key financial terms for common stock include authorized shares, issued shares, par value, additional paid-in capital, retained earnings, and capital surplus which represent amounts paid beyond par value.
The key difference between pvt and public co,
There are key differences between private and public limited companies. A private limited company requires 2 or more members, has a maximum of 200 members, and restricts the transfer of shares. A public limited company requires 7 or more members, has no limit on members, and allows public subscription of shares. Private limited companies are smaller in scope while public companies can raise capital more widely from the public and have greater legal restrictions.
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Syllabus
Chapter-1
Introduction to objective, scope and outcome the subject
Chapter 2
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Surveying: Object Principles & Types of Surveying; Site Plans, Plans & Maps; Scales & Unit of different Measurements.
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- 1. NAZARETH COLLEGE OF ARTS AND SCIENCE DEPARTMENT OF COMMERCE CORPORATE ACCOUNTING UNIT-1:SHARE CAPITAL Mrs.P.K.Geethanjali Dept of Commerce
- 2. Chapter 1: Issue of Shares Meaning of a Joint Stock Company: Joint Stock Company in an association of individuals in a business enterprise with transferable shares of stock much like a corporate except that stockholders are liable for the debts of the business. P.K.Geethanjali
- 3. FEATURES OR CHARACTERISTICS OF A JOINT STOCK COMPANY ▪ Artificial Persons ▪ Created by Law ▪ Capital Divisible intoTransferable Shares ▪ Limited Liability ▪ Perpetual Succession ▪ Ownership is Distinct from management ▪ Common Seal ▪ Voluntary Association ▪ Separate legal entity P.K.Geethanjali
- 4. SHARE CAPITAL Share capital is the money a company raises by issuing common or preferred stock.... It means the total amount raised by the company in sales of shares. Share capital is the amount of nominal value of share held by the shareholders. It is the face value of the shares that have been issued to the shareholders. ... For example, if a company sold 100,000 shares which have a face value of $ 1 per share, then the issued share capital of such a company is $100,000. P.K.Geethanjali
- 5. TYPES OF SHARE CAPITAL AUTHORISED , REGISTERED CAPITAL ISSUED CAPITAL SUBSCRIBED CAPITAL CALLED UP CAPITAL PAID UP CAPITAL RESERVE CAPITAL EXAMPLE X Ltd. Registered with a capital of Rs.10,00,000 with 1,00,000 shares @Rs.10 X Ltd. Issued 5000 shares with application money of Rs.2 X Ltd. Received application for 4500 shares X Ltd. Made allotment of Rs.3 X Ltd. Received allotment money from all shareholders P.K.Geethanjali
- 6. MEANING OF SHARES Shares are units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends.The two main types of shares are common shares and preferred shares. P.K.Geethanjali
- 7. TYPES OF SHARES ▪ PREFERENCE SHARES Cumulative Preference Share Non-Cumulative Preference Share Redeemable Preference Share Participating and Non-Participating Preference Share EQUITY SHARES DEFERRED SHARES OR FOUNDERS SHARES P.K.Geethanjali
- 8. PROCEDURES FOR ISSUE OF SHARES Issue of Prospects Receipt of Share Application Allotment of Shares Calls P.K.Geethanjali