Accountancy · Ch 2 — Accounting for Share Capital
Terms Introduced in the Chapter
Terms Introduced in the Chapter
The key terms introduced in this chapter, with a short meanin …
An incorporated association of persons that the law treats as a separate legal person, able to own property and carry on business in its own name; its capital is contributed by a large number of shareholders who act …
The total capital a company raises by issuing shares to its shareholders. It represents the owners' contribution to the …
The maximum amount of share capital a company is authorised to issue, as stated in its Memorandum of Association. It is also called nomin …
That part of the authorised capital which the company actually offers to the public (or to others) …
The portion of the authorised capital that the company has not yet offered for …
That part of the issued capital which has actually been applied for and allotted t …
Subscribed shares on which the company has called up the entire face value and the shareholders hav …
Subscribed shares on which either the full face value has not yet been called up, or some called-up amount remains unpai …
The amount of called-up capital that shareholders have actually paid. It equals called-up capital less an …
The part of the uncalled subscribed capital that a company resolves, by special resolution, to call up only in the event of winding up. It is not available in the …
The equal units into which a company's share capital is divided; each share is a fractional part of the capital and forms the basis of o …
Shares carrying a preferential right to a fixed rate of dividend and to the repayment of capital on winding up, ahead of th …
Preference shares that are not repayable during the lifetime of the company. Under the Companies Act, 2013 a company may issue only redeemable preference shares, so purely irredeemable prefere …
Shares that are not preference shares. They carry no fixed rate of dividend, bear the main risk and reward of ownership, and norma …
The allotment of fully or partly paid shares in payment for a business or assets acquired, where the vendors agree to receive …
The excess of a share's issue price over its face (nominal) value. The premium is credited to the Securities Premium Reserve, and its use is …
The amount an applicant pays along with the application for shares; on allotment it is adjusted towards the share capita …
The minimum amount of the issue (at least 90% of the shares offered) that must be subscribed before a company can proceed to allot shares. If it is not received, the …
Demands made by the company, after application and allotment, requiring shareholders to pay the amount that remains unpaid on their shares, as and …
The amount called up on shares but not paid by the shareholders. A company may charge interest on it if its Articles of A …
Any amount a shareholder pays in excess of the amount currently due on the shares. A company is obliged to pay interest on it if it accepts such a …
A situation in which the applications received are for more shares than the company offered …
A situation in which the applications received are for fewer shares than the company offered …
The cancellation of a shareholder's shares for failure to pay the allotment or call money. The amount already received on those shares is retained by …
The re-allotment of previously forfeited shares to new shareholders. They may be reissued at par, at a premium or at a discount, but the discount allowed cannot exceed the am …
A company's purchase of its own shares out of its free reserves, securities premium, or the proceeds of a fresh issue, under Section 68 of the Companies Act, 2013. The share …