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Commercial Correspondence and Secretarial Practice · Class 12 Commerce

Ch 1Issue of Shares — Class 12 Commercial Correspondence and Secretarial Practice, concept-first.

A share is the smallest unit into which a company's share capital is divided, and it represents the shareholder's proportionate ownership interest in the company along with a corresponding bundle of rights — to vote, to receive dividend, and to share in surplus assets on winding up.

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Key concepts

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Types of Shares — Equity and Preference

Section 43 of the Companies Act, 2013 recognises only two kinds of share capital a company limited by shares may issue: equity share capital and preference share capital.

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Chapter contents

The NCERT structure, section by section. Open a section to see its questions, then read the concept-first solution.

1

Meaning and Kinds of Shares

A share is the smallest unit into which a company's share capital is divided, and it represents the shareholder's proportionate ownership interest in the company along with a corresponding bundle of r…

2

Methods of Raising Share Capital

A company does not raise fresh share capital only in one standard way; the Companies Act, 2013 — read together with Section 23, which sets out how a public and a private company may respectively offer…

3

Procedure for a Public Issue of Shares

Making a public issue of shares is a multi-stage process precisely because it invites money from the general public rather than a known, identified set of investors, and the law correspondingly demand…

4

Minimum Subscription

Minimum subscription is the least amount of capital, stated in the prospectus by the Board, that the company considers necessary to meet the specific objects the issue was raised for — the cost of the…

5

Over-Subscription and Under-Subscription

A public issue rarely attracts applications for exactly the number of shares offered. Two opposite outcomes are possible once the issue closes, and the Companies Act, 2013, together with SEBI's regula…

6

Allotment of Shares — Rules and Restrictions

Allotment is the act by which a company's Board (or a committee it authorises) appropriates a specific number of shares to a specific applicant, converting that person from a mere applicant into a sha…

7

Issue of Shares at Par, at Premium, and the Prohibition on Discount

Every share carries a nominal (or face) value, fixed by the company's Memorandum of Association and stated on the share itself.

Exercises

+Show 13 questions13 questions
  1. Q1Distinguish between equity shares and preference shares under the Companies Act, 2013.Free
  2. Q2Explain the different kinds of preference shares that a company may issue.Free
  3. Q3Explain the various methods by which a company may raise share capital under the Companies Act, 2013.Free
  4. Q4Distinguish between a rights issue and a bonus issue of shares.Preview
  5. Q5Write short notes on: (a) Private Placement, (b) Preferential Allotment, and (c) Employees Stock Option Scheme (ESOP) and Sweat Equity Share…Preview
  6. Q6Describe the procedure a public company follows to make a public issue of shares.Preview
  7. Q7What is a prospectus? State the matters a prospectus must disclose and the liability attached to a misleading prospectus.Preview
  8. Q8What is meant by "minimum subscription"? Explain the legal consequences if minimum subscription is not received in a public issue.Preview
  9. Q9How does a company deal with over-subscription of shares in a public issue?Preview
  10. Q10What is under-subscription? Explain how a company deals with it, and the difference this makes to whether allotment can proceed at all.Preview
  11. Q11State the legal rules that govern a valid allotment of shares. What is meant by an "irregular allotment," and what remedy does an allottee h…Preview
  12. Q12Explain the provisions of Section 52 of the Companies Act, 2013 relating to issue of shares at a premium, and the purposes for which the sec…Preview
  13. Q13Can a company issue shares at a discount? Explain the legal position under Section 53 of the Companies Act, 2013.Preview

Sample & Board Papers

Sample papers and previous-year board questions for this subject.

+Show 58 questions58 questions
  1. Q1Which allotment of share is void from the very beginning? (a) Irregular (b) Illegal (c) Before public issue (d) Private placementPreview
  2. Q2How much minimum percentage of the face value to be called up as share application money? (a) 5% (b) 10% (c) 12% (d) 15%Preview
  3. Q3Which of the following is not included in the procedure for share application and share allotment? (a) Opening of a bank account (b) Receivi…Preview
  4. Q4For a shareholder shares are ________ . (a) movable assets (b) responsibility (c) cash asset (d) immovable assetPreview
  5. Q5Which document is issued by the company to collect capital? (a) Share certificate (b) Prospectus (c) Article of association (d) Memorandum o…Preview
  6. Q6What does premium mean?Preview
  7. Q7What is share forfeiture?Preview
  8. Q8How are share applications classified, according to SEBI guidelines?Preview
  9. Q9Write the circumstances of share surrender.Preview
  10. Q10Write the duties of the Secretary Regarding Share Call.Preview
  11. Q11Explain the procedure of Share Allotment.Preview
  12. Q12Which of the following institutions controls and gives instructions to all the banks of the country? (a) (A) State Government (b) (B) Reserv…Preview
  13. Q13Fire Brigade service is called which of the following services? (a) (A) Private (b) (B) Public (c) (C) Government (d) (D) Semi-GovernmentPreview
  14. Q14____ means a foresighted arrangement to meet possible monetary loss or eventuality. (a) (A) Bank Loan (b) (B) Notice (c) (C) Debenture (d) (…Preview
  15. Q15Which of the following is not included in Oral Presentation? (a) (A) Memo (b) (B) Elocution (c) (C) Debate (d) (D) DialoguePreview
  16. Q16By which document can an invitation be made for public issue? (a) (A) Memorandum of Association (b) (B) Prospectus (c) (C) Articles of Assoc…Preview
  17. Q17In how many types share dividend is distributed? (a) (A) 2 (b) (B) 3 (c) (C) 4 (d) (D) 1Preview
  18. Q18What does premium mean?Preview
  19. Q19Write full form of E.C.S.Preview
  20. Q20Who should be at the centre of presentation?Preview
  21. Q21A company takes help of which intermediaries for public issue?Preview
  22. Q22What is returning of share certificates to the company by shareholder called?Preview
  23. Q23Regarding which issues are complaint letters written to the bank?Preview
  24. Q24From where is financial aid received by corporations or departments providing public utility services?Preview
  25. Q25What things are included in the second part of the letter of Renunciation?Preview
  26. Q26What are the reasons for share surrender?Preview
  27. Q27Write an E-mail on behalf of Sajawat Furniture, Vadodara to order 100 tables and 200 chairs to All in one Furniture Manufacturing, Mumbai.Preview
  28. Q28Distinguish between irregular allotment of shares and illegal allotment of shares.Preview
  29. Q29Write a letter to Bank of Baroda, Jamnagar to obtain Educational Loan for higher studies.Preview
  30. Q30Draft a letter of complaint to the post and parcel department for irregular receipt of post/parcel to the institution's address.Preview
  31. Q31Draft a letter to Ambaji based Bal Vikas, a service oriented organisation requesting for arrangement of a career guidance programme in your…Preview
  32. Q32Mrs. Bharti Mittal wishes to get (duration) mode of premium payment changed. Write a letter of request to the insurance company.Preview
  33. Q33Prepare an individual report after visit to the Civil Hospital.Preview
  34. Q34In Bank correspondence which of the following things is mentioned when secrecy is to be maintained? (a) (A) Punctuality (b) (B) Financial (c…Preview
  35. Q35With which organisation is correspondence carried out to get adequate water-supply in big cities? (a) (A) State Government (b) (B) Municipal…Preview
  36. Q36Which type of an insurance policy allows claim of insured amount after death of the insured person to the nominee/assignee? (a) (A) Whole-li…Preview
  37. Q37Which number of the bank is to be given for RTGS to transfer the amount in the account of the customer? (a) (A) Mobile (b) (B) Phone (c) (C)…Preview
  38. Q38Who should be at the centre of presentation? (a) (A) Attendees (b) (B) Officers (c) (C) Leaders (d) (D) PresentersPreview
  39. Q39Minimum gap between two installments should be _____. (a) (A) 1 month (b) (B) 2 months (c) (C) 3 months (d) (D) 4 monthsPreview
  40. Q40Letter of renunciation is related to _____. (a) (A) Share forfeiture (b) (B) Resignation of promoters (c) (C) Right share (d) (D) Refund of…Preview
  41. Q41What are the main types of insurance?Preview
  42. Q42What is the mode of payment in E-booking?Preview
  43. Q43Give two examples of awakening type of presentation.Preview
  44. Q44What is offer for sale?Preview
  45. Q45State the types of dividend.Preview
  46. Q46Which style and format is to be followed in bank correspondence?Preview
  47. Q47State the various reasons for correspondence with local organisation.Preview
  48. Q48What is called statement of Share Allotment?Preview
  49. Q49Which details should be included while preparation of list of call-on shares?Preview
  50. Q50Who can be allotted sweat share?Preview
  51. Q51In the absence of which elements share allotment is considered illegal?Preview
  52. Q52What are the points to be considered while writing an E-mail?Preview
  53. Q53State the various provisions of The Companies Act regarding share call.Preview
  54. Q54You hold account in Bank of India, Vadodara. Draft a letter of complaint to the manager regarding indecent behaviour of the employee of the…Preview
  55. Q55Draft a letter regarding difficulties being faced due to encroachment of carts and hawkers on public roads of the city.Preview
  56. Q56Write a letter requesting to cancel demand notice as income is not taxable on behalf of Saraswati Book Store.Preview
  57. Q57Write a letter from the nominee of Shri Poonamchand Ravat claiming the insured amount on his LIP.Preview
  58. Q58Prepare an individual report after visit to a Bank.Preview