SHARES AND SHARE CAPITAL
Its a brush up learning on shares , different types of shares and accounting of share capital.
Every business unit require capital to run it. The capital of a company known as share capital divided into different units with different value called shares.
Lets discuss about different types of Share Capital:
1. Authorised capital: is the capital required to registered the company or the total capital raised by the company. This is also known as nominal or registered capital.
2. Issued capital: is the part of authorised capital which is issued to general public subscripttion.
3. Subscribed capital: is the part of issued capital for which applications are received from public.
4. Called – up capital: is the amount of the shares which is actually offered by the company.
5. Paid – up capital: is the part of the called – up capital which is paid by the public.
The following are different types of Shares: There are two types of shares. They are discussed as follows:
1. Preference Shares: are those shares which will get fixed rate of dividents and also get repayment of capital while winding up of the company. Preference share may be:
a) Cumulative Preference Shares: If the company is not able to earn profit in particular year, then a cumulative preference shareholders will not get the divident in that period but it will be carry forward to subsiquent year. Thus a cumulative preference shareholders is sure to receive divident on his shares for lal the years out of the earnings of the company.
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