1. SHARE CAPITAL
- ROMITH

2. INTODUCTION :
 The units of fixed amount which are divided in
to certain indivisible are called as SHARES.
 SHARE means share in the share capital of a
company.
 The person having share in the company is
called as SHARE HOLDER.
 Prior to 1996, every share holder should get a
share certificate.

3.  SHARE HOLDERS have right to vote .
 They also have the right to profits of the
company , and they bear the losses too.
 Profit distributed to the share holders is
called DIVIDEND.

4. TYPES OF SHARES :
 According to companies Act (1956), a
company can issue two types of shares:
1. Preference shares
2. Equity shares

5. PREFERENCE SHARES:
 Preference shares carry special rights with
respect to the payment of
dividend, repayment of capital on liquidation
of the company , or both.
 The dividends paid on these shares are
fixed and are paid first.
 When the company goes into liquidation
, the repayment of capital should be paid
first to these shares.

6. TYPES OF PREFERENCE SHARES:
 Cumulative preference shares: The
profits are accumulated paid. In case , the
company is facing loss then the dividends
accumulated on preferencible shares will be
paid in the year when company gains profit
.
 Non-cumulative P. shares: These
preferencible share holders do not get
accumulated profits.
 Participating P. shares : They enjoy voting
rights

7.  Non-participating P.shares: They do not
enjoy voting rights.
 Redeemable P.shares: Capital should be
redeemed in some cases during life time of
the organization.
 Irredeemable P.shares: Here the capital is
not payable during the life time of the
business.
 Convertible P.shares: These shares can
be converted into Equity share holders after
a certain period of time.

8.  Non-convertible P.shares: These shares
are not converted into equity shares.

9. EQUITY SHARES:
 These are also called ORDINARY
SHARES.
 According to companies act (1956) , the
shares which are not preference shares are
EQUITY SHARES.
 The rate of dividend of equity shares is not
fixed , it will be fluctuate with company’s
profits.
 These share holders participate actively in
the affairs of the company an they have a
right to vote in AGM. These are governed
by the Articles of Association.