SHARES

SHARESMEANINGTYPESSHARE CAPITALTYPES OF SHARE CAPITAL

MeaningWhen the total capital of the company divided into units of small denominations. Each such unit is called share.for example if the total capital of the company is Rs 100000 divided into 1000 units of Rs 100 each, each unit of Rs 100 will be called Share of Rs 100 eachDefinationAccording to Section2(46)of the company act 1956,a “Share mean share in the share capital of a company and includes stock except where a distinction between stock and shares is expressed or implied”

TYPES OF SHARE

1.Preference SharesPreference shares are those shares which carry the following two rights. A) In respect of dividends ,it carries a preferential right to be paid at a fixed rate or a fixed amount before anything is paid on the equity shares.B) To be repaid the amount of the capital on the winding up of a company, before the repayment of equity shares.

2. Equity Shares Equity shares are those shares ,which are entitled to dividend and repayment only after the claims of preference shares have been satisfied . that is an equity share holder is entitled to all the profits of a company after settling the fixed claim on preference shares . They are called as real owner of the company because they have voting rights and full right to participate in the management of the company.

SHARE CAPITALShare capital means the capital raised by the issue of shares . many individuals and institutions contribute varying sums to the company’s capital yet there is no separate capital account for each of these individuals or institutions. There is one consolidated capital account called share capital account

TYPES OF SHARE CAPITAL

1) Authorised , Registered or Nominal Capital2) Issued Capital3) Subscribed Capital4) Called-up Capital5) Paid-up Capital6) Reserve capital

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