Ch 8Company Accounts – Issue of Shares — Class 12 Book-Keeping and Accountancy, concept-first.

A joint stock company is a distinct artificial legal person, created by law, having its own capital divided into a large number of small, transferable units called shares.

A company's share capital is not a single, fixed figure — it passes through several distinct stages, each with its own name, and a student must be able to define and distinguish every one of them.

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

When a company wants to raise capital, it invites the public through a prospectus to apply for shares.

A company whose shares are in strong demand may issue them at a premium — that is, for a price higher than the face (nominal) value.

Not every shareholder pays exactly on time, and the Companies Act — through Table F, the model set of Articles of Association in Schedule I — provides for both possibilities: a shareholder paying late…

When the number of shares applied for exceeds the number of shares actually offered, the issue is said to be over-subscribed.

If a shareholder fails to pay a call (or calls) even after the company's final reminder notice, the Board of Directors may, following the procedure laid down in the company's Articles, forfeit the sha…

Forfeited shares do not remain 'dead' — the company's Board can re-issue them to a new applicant, usually at par, at a premium, or (very commonly, since the shares already carry some money the company…

Not every share is issued for cash received through the bank. A company may issue shares directly to vendors or promoters in exchange for assets purchased, or a running business taken over, instead of…

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