Issue of Shares

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 […]

These terms often sound similar but they are considerably different. Face Value This is the value per share, which is fixed at the time of registration of the company. It is also known as nominal value or par value. This is the value per share, which is recorded in the memorandum of Association. It is

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

The key points of difference between equity shares and preference shares are summarised as follows :

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

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

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