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Accountancy · Class 12 Commerce

Ch 8Company Accounts — Class 12 Accountancy, concept-first.

A joint stock company is a form of business organisation that raises its long-term capital from a large number of members by issuing shares. The total capital a company is permitted to raise is stated in its Memorandum of Association, and it is divided into small units of a fixed value called shares.

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Key concepts

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Share Capital and Classes of Shares

Share capital passes through defined stages — authorised, issued, subscribed, called-up and paid-up — and no company may ever call for more than a share's face value across all instalments combined.

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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 Classes of Share Capital

A joint stock company is a form of business organisation that raises its long-term capital from a large number of members by issuing shares.

2

Issue of Shares — At Par, at Premium and at Discount

When a company decides to raise share capital from the public, it follows a set procedure: inviting applications, allotting shares to successful applicants, and then making one or more calls to collec…

3

Under-Subscription, Over-Subscription and Calls-in-Arrears/Advance

In practice, the number of shares actually applied for rarely matches the number of shares issued exactly.

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Forfeiture of Shares

If a shareholder fails to pay a call (or the amount due on allotment) even after the company serves a formal notice allowing a further reasonable period, the Board of Directors — where the Articles of…

5

Reissue of Forfeited Shares

Once shares are forfeited, they become the company's own property again, and the Board may reissue them to a new applicant — at par, at a premium, or at a discount — subject to one important restricti…

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Issue of Debentures

A debenture, as defined in Section 2(30) of the Companies Act, 2013, is an instrument evidencing a debt — it acknowledges that the company has borrowed money from the debenture-holder and promises to…

Exercises

+Show 2 questions2 questions
  1. Q12Explain the meaning of Authorised Capital, Issued Capital, Subscribed Capital and Paid-up Capital, and state any two points of difference be…Free
  2. Q13After the reissue of forfeited shares, the balance remaining in the Share Forfeiture Account (relating to the shares reissued) is transferre…Preview

Sample & Board Papers

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

+Show 8 questions8 questions
  1. Q1Explain the categories of share capital.Preview
  2. Q2What is an equity share ?Preview
  3. Q3Explain the types of issue of shares.Preview
  4. Q4What is an Equity share ?Preview
  5. Q5Explain the classes of shares.Preview
  6. Q6What is authorized capital ?Preview
  7. Q7Explain the types of issue of shares.Preview
  8. Q8Write a short note on: Equity shares.Preview

More questions

+Show 11 questions11 questions
  1. Q1Sunrise Papers Ltd issued 10,000 equity shares of ₹10 each, payable ₹3 on application, ₹4 on allotment and ₹3 on first and final call. All t…Free
  2. Q2XYZ Traders Ltd issued 5,000 equity shares of ₹100 each at a premium of ₹20 per share, payable ₹30 on application, ₹60 on allotment (includi…Free
  3. Q3Deccan Textiles Ltd invited applications for 20,000 equity shares of ₹10 each, payable ₹3 on application, ₹4 on allotment and ₹3 on first an…Free
  4. Q4Global Electronics Ltd invited applications for 10,000 equity shares of ₹10 each, payable ₹3 on application, ₹4 on allotment and ₹3 on first…Preview
  5. Q5Silver Star Ltd made a first call of ₹5 per share on its 10,000 fully subscribed equity shares of ₹10 each, due on 1 April. Ashok, who held…Preview
  6. Q6Ravi Enterprises Ltd forfeited 500 equity shares of ₹10 each, on which only ₹8 had been called up (₹2 on application, ₹3 on allotment and ₹3…Preview
  7. Q7Shine Apparels Ltd forfeited 200 equity shares of ₹10 each, issued at a premium of ₹2 per share, for non-payment of the final call of ₹4 per…Preview
  8. Q8Bright Foods Ltd forfeited 100 equity shares of ₹10 each, issued at a premium of ₹3 per share, for non-payment of the final call of ₹6 per s…Preview
  9. Q9Sunshine Garments Ltd had forfeited 300 equity shares of ₹10 each, fully called-up, for non-payment of the final call of ₹3 per share; ₹7 pe…Preview
  10. Q10Vishal Steels Ltd issued 2,000, 9% Debentures of ₹100 each at par, the full amount being payable on application, redeemable at par after fiv…Preview
  11. Q11Kiran Industries Ltd issued 1,000, 10% Debentures of ₹100 each at a discount of 5%, redeemable at a premium of 10% after five years, the ful…Preview