Share Capital Essay

1831 Words Nov 16th, 2010 8 Pages
Share Capital
It is the amount of money contributed by the shareholders for the furtherance of objectives of the company for which it was created. * Equity / Preference Share * Par value * Number of Shares in each category * Total amount
TYPES OF SHARE CAPITAL * AUTHORISED CAPITAL * ISSUED CAPITAL * SUBSCRIBED CAPITAL * CALLED UP CAPITAL * PAID-UP CAPITAL
AUTHORISED CAPITAL * MAXIMUM amount of share capital that the company is authorised by its constitutional documents to issue to shareholders. * Part of the authorised capital can (and frequently does) remain unissued. * EXAMPLE: AS PER THE CONSTITUTIONAL DOCUMENT OF A NEW COMPANY ‘XYZ.LTD’
IT CAN ISSUE A TOTAL OF 10 LAKH
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UNCALLED CAPITAL:
THE REMANING 4RS/SHARE
PAID UP CAPITAL * AMOUNT OF CALLED UP CAPITAL WHICH HAS BEEN ACTUALLY PAID BY SHARE HOLDERS AND ACTUAL ALLOTMENT OF SHARES IS MADE * CALL IN AREARS : BALANCE OF CALLED UP AMOUNT ON SHARES WHICH HAS NOT BEEN RECIVED BY COMPANY

EXAMPLE:
MR A PAID RS 5/SHARE INSTEAD OF CALLED UP AMOUNT OF RS 6/SHARE
FORFEITURE: IT IS THE PROCESS BY WHICH A COMPANY CANCELS THE POWER OF A SHARE HOLDER IF HE/SHE IS NOT ABLE TO PAY THE MONEY WHEN THE COMPANY DEMANDS FOR IT. SURRENDER: IT IS A VOLUNTARY ACT OF GIVING UP SHARES OF A COMPANY BY THE SHARE HOLDER WHEN HE/SHE IS NOT ABLE TO PAY THE CALLED MONEY.

Present Status of Indian Accounting Standard * Presently, the Accounting Standards Board (ASB) of the Institute of Chartered accountants of India (ICAI) formulates Accounting Standards (ASs) based on the IFRSs keeping in view the local conditions including legal and economic environment, which have recently been notified by the Central Government under the Companies Act, 1956. * Accordingly, the ASs depart from the corresponding IFRSs to maintain consistency with legal, regulatory and economic environment, and keeping in view the level of preparedness of the industry and the accounting professionals. * In some cases, departures are made on account of conceptual differences

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