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CAPITAL A/C ZERO

thanumalayan (senior assistant) (111 Points)

21 March 2008

Is there any Balance Sheet, with Capital Account(s) be " ZERO ". If so, pls give me an example...

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4 Replies

CA Gita (Chartered Accountant) (29 Points)
Replied 21 March 2008

Atleast i have not come across such cases. However companies incorporated as per section 25 of the Companies Act ,1956 may not be having any share capital

CA AJAY GUPTA (PRACTICE) (86 Points)
Replied 21 March 2008

First it is not clear about the entity about which you have mentioned. In case of Proprietary / Partnership concerns there could be a possibility that Balance in capital account of prop/ partner is having "Debit Balance" at the end or during a period. However, in case of corporate entities it can not happen anyway.

thanumalayan (senior assistant) (111 Points)
Replied 22 March 2008

While verifying the advance accounts of a Bank / Branch, one Balance Sheet of an individual concern, it was like that. I think no disclosure for Net Pofit / Net Loss adjustment has been made in the Balance Sheet. All the other accounts like, deposits, advance, fixed assets, investments, etc are all there in the B / S.

(Guest)

Section 25 Companies have no share capital. This means that there is no zero capital. BUt there no CAPITAL at all. Even in partnership accounts only current a/c can be zero. CApital accounts cannot be zero. Good question