Admission of a partner in a partnership firm refers to the process of adding a new member to the partnership. When a new partner is admitted to the partnership, they become jointly and severally liable for the partnership’s debts and obligations. This means that each individual partner is responsible for the entire amount of the […]
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If any calls are received in advance Forfeiture of Shares Calls in Arrears If calls in arrears account is used then the arrear amount is kept in a separate account and the Share allotment or share call account are credited with the full amount. Journal entries will change as below : In case the whole
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Share Capital can be of different types and each type is discussed below : Authorised Capital This is also known as nominal capital or registered capital This is the maximum amount of capital which the company can raise and for which the company has received approval from government (ROC). It is stated in the memorandum
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The key points of difference between equity shares and preference shares are summarised as follows :
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These are shares which gives the voting rights. So the equity shareholders are the real owners of the company as they participate in decision making. The voting rights are proportionate to the shares held with respect to the total equity share capital of the company. Equity shareholders can get the dividend only after the dividend
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Preference shares can be broadly classified based on following four criteria : Based on right to receive dividend There can be two kinds of preference shares : 1) Cumulative Preference Shares 2) Non-Cumulative Preference shares Cumulative preference shares are those shares which has the right to receive arreas of dividend. Suppose a company cannot pay
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Companies will usually need huge capital to run the business. Such huge capital cannot be contributed by an individual or a small group of individuals. So for raising huge capital for running big business, thousands and lakhs of individuals and institutions will contribute money. So to facilitate the allocation of capital to so many individuals
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Companies raise money from the public for running business. The amount of issue is not some ad hoc amount, but a carefully calculated amount based on business requirements. Suppose you have to buy a dress, which costs ru. pees 1000. If you have rupees 800 only can you buy the dress? The answer is no.
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Promotion This is the first stage of the company’s incorporation. a group of persons agreed to start the business and form a company. These persons are known as promoters Registration of a Company (Also called incorporation) Since the company is an artificial perso so it cannot be made naturally. Thus companies are formed by following
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Classification of Companies Based on Liability – Complete Guide for Students ⚖️ Classification of Companies Based on Liability ⚖️ Learn how much risk you take when starting different types of companies! What is Liability? Liability means how much money you personally owe if your company fails or cannot pay its debts. Why It Matters: 💰
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