meaning of company and share capital. types of share capital and types of shares. guidelines for allotment of shares, difference between stock vs. share.

1. Presented by:-
RAHUL KUMAR
(835)
MEENAL GUPTA
(827)
M B A 3 R D S E M 1

2. What is a Company?
“A Company is an artificial person
created by law, having separate
entity, with a perpetual succession
and common seal”
M B A 3 R D S E M 2

3. Meaning of share capital
 Share capital denotes the amount of capital raised
by the issue of share by a company. It is collected
through the issue of shares and remains with the
company till the wound up of company.
 Share capital is owned capital of the company, since it
is the money of share holders and the shareholders
are the real owners of the company.
 The total share capital is divided into small parts and
each part is called a “share” share is the smallest part
of the total capital of a company.
M B A 3 R D S E M 3

4. Types of share capital
 Authorized share capital
 Issued share capital
 Unissued share capital
 Subscribed and unsubscribed share
capital
 Called up capital
 Uncalled capital
 Paid up share capital
M B A 3 R D S E M 4

5. Authorized share capital
Authorized capital is the maximum amount of
capital which a company can collect or raise by
selling it’s shares to the general public, it also
called as nominal capital or registered capital.
Example:-
A company wants to sell 100 shares of
Rs10/- each, so the total amount collected by
the company is Rs1000/- i.e. 100*10=1000.
M B A 3 R D S E M 5

6.  Issued share capital
Issued share capital is that part of authorized share
capital which is actually issued to the general public for
subscription.
Example:-
A company has issued 80 shares of Rs10/- each so
the issued capital is Rs800/-.
 Unissued share capital
Un-Issued share capital is that part of authorized capital
which is not being issued to the public
Example:-
company has not issued 20 shares of Rs10/- each
so 200rs is unissued capital of the company
M B A 3 R D S E M 6

7. Subscribed share capital
Subscribed capital is that part of issued capital
which is actually subscribed by the general
public. That company has issued 80 shares of
10 each, out of which 70 shares are bought by
the general public so the subscribed capital is
700 (70*10).
M B A 3 R D S E M 7

8. Called up capital
Called up capital is that amount of nominal
value of shares subscribed for which the
company a has asked its share holders to pay
means of calls or otherwise.
Example:-
A company has asked to its
shareholders to pay Rs5/- at the time pf
allotment.
M B A 3 R D S E M 8

9. Paid up capital
The paid up capital is that part of issued capital
which is has been paid by the shareholders. The
money received on each share as a result of calls is
said to be paid up capital.
Un called capital:-
Un called share capital is that
part of issued capital which remains uncalled on
shares.
M B A 3 R D S E M 9

10.  Equity shares
 Preference
shares
M B A 3 R D S E M 10

11. Equity shares
Equity share holders are those which are
ordinary in the course of company’s business.
They are also called ordinary shares. These
shareholders do not enjoy any preference right
regarding payment of dividend and re-payment
of capital. Equity shareholders are paid
dividend out of the profits earned by the
company. Higher the profits higher will be the
dividend and lower the profits, lower will be the
dividend. these are the real owners of the
company having voting right
M B A 3 R D S E M 11

12. Preference share
Preference shares are those shares have
certain preferential rights over the equity
shareholders. They have not any voting right.
 Cumulative and non- cumulative shares
 Participating and non- participating shares
 Convertible and non-convertible shares
 Redeemable preference shares
M B A 3 R D S E M 12

13. Other terms
 Right shares
 Bonus shares
 Qualified shares
 Sweat equity shares
 Share certificate
 Share warrant
M B A 3 R D S E M 13

14. Stages of raising share capital
1. Share application
2. Share allotment
3. Share first call
4. Share second call
5. Share final call
M B A 3 R D S E M 14

15. GUIDELINES FOR ALLOTMENT OF SHARES
 Allotment should not be given to the applicants before
the beginning of 5th day after the issue of prospectus.
 No allotment shall be made unless the amount mentioned
in the prospectus as minimum subscription has been
received either by cash or by cheque.
 Share application money should not less than 5% of face
value of share.
 If minimum subscription is not received within 30 days of
closure of issue all the money received from applicants
repaid within 15 days from the closure of issue and for
delay beyond 15 days 15% PA interest shall be payable.
 Allotment made without receiving minimum subscription
is irregular & voidable at the option of the applicant,
M B A 3 R D S E M 15

16. GUIDELINES FOR ALLOTMENT OF SHARES
(Cont….)
 All money received from applicants for shares should be
deposited in separate account maintained in schedule
bank.
 A list of applicants should be prepared showing details of
name, address, money received.
 Basis of allotment in case of over subscription ( pro rata
allotment)
 the act 2013 has prohibited issue of shares at a discount.
Under the act 2013 only sweat equity shares can issued
at discount.
 Company may issue preference shares for a period
exceeding 20 years but not exceeding 30 years.
 a company can issue shares at premium if the AOA
authorized.
M B A 3 R D S E M 16

17. Other relative terms
Calls in arrears
Calls in advance
Transfer of shares
Transmission of shares
M B A 3 R D S E M 17

18. M B A 3 R D S E M 18

19. M B A 3 R D S E M 19