Tag Archives | Capital

Stock and Shares of a Company | Capital | Accounting

In this article we will discuss about stock and shares of a company. Also learn about the difference between them. Stock: When all the shares of a company have been fully paid up, they may be converted into stock if so authorised by the Articles, as per Sec. 94(1) (c). It is another kind of […]

Buy-Back of Shares: 4 Modes | India | Accounting

In this article we will discuss about the four important modes of buy-back of shares. 1. From the existing security holders on a proportionate basis through the tender offer; or 2. From the open market through: (i) Book-building process, (ii) Stock exchange; 3. From odd lots, that is to say, where the lot of securities […]

Redemption of Preference Shares | India | Company

In this article we will discuss about:- 1. Introduction to Redemption of Preference Shares 2. Companies (Amendment) Act 1988 and 1996 3. Sources 4. Proceeds of Fresh Issue. Introduction to Redemption of Preference Shares: A company cannot return its share capital to its shareholders during its life time without the permission of the Court (Sec. […]

Important Conditions for Buy-Back of Shares | India | Accounting

The conditions precedent to buy-back, as laid down in Section 77A (2) of the Companies Act are:- (a) The company’s article should authorise the buy-back. In case the articles are silent on this point, the same has to be amended to include a provision to that effect; (b) No company shall purchase its own shares […]

Debentures: Features and Classes | India | Accounting

In this article we will discuss about:- 1. Meaning of a Debenture 2. Features of a Debenture 3. Classes 4. Debenture and Debenture Stock. Meaning of a Debenture: Generally, companies, for their expansion and further development, may require funds. Funds flow in from the internal and external sources i.e. the owners’ and outsiders’ contribution. Internal […]

Difference between Shares and Debentures | Company | Accounting

The upcoming discussion will update you about the difference between shares and debentures. Difference # Shares: 1. Shares denote the owned capital of a Company. 2. A shareholder is a part proprietor of a Company. 3. A shareholder gets dividend, which shall be payable out of undistributed profits. 4. A shareholder cannot receive any divid­end […]

Underwriting of Shares and Debentures | Accounting

In this article we will discuss about:- 1. Meaning of Underwriting 2. Functions of a Broker in Underwriting 3. Sub Underwriting 4. Underwriting Commission 5. Importance 6. Types 7. Marked or Unmarked Applications. Meaning of Underwriting: ‘Underwriting’ refers to the functions of an under-writer. An under-writer may be an individual, firm or a joint stock […]

Bonus Shares: Meaning and Advantages | Company

In this article we will discuss about:- 1. Meaning of Bonus Shares 2. Advantages of the Issue of Bonus Shares 3. Guidelines 4. Accounting Treatment. Meaning of Bonus Shares: Sometimes, a large amount of reserves are accumulated with the companies which are undistributed past profits, and the companies like to distribute these accumulated profits. In […]

Re-Organisation through Surrender of Shares | Capital

In this article we will discuss about re-organisation of capital through surrender of shares, explained with the help of a suitable illustration. Under this method, shares are sub-divided into shares of smaller denominations and shareholders are made to surrender a part of them to facilitate capital re-organisation. Such surrendered shares are usually utilised to reduce […]

Steps for Reconstruction Scheme | Capital

The following steps are taken into consideration for drafting a scheme, in brief:  1. Losses to be written off are to be determined by adding accumulated losses, fictitious assets, overvaluation of assets, under-provision of liabilities, preliminary expenses etc. The total amount of losses to be written off is thus determined and is reduced from the […]

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