Types of shares and share capital

Share capitalShare capital: share capital means a particular amount of money with which a business is started.Share capital of the company is the capital contributed by the shareholders. This is the real capital of the company. company need finances for business activities.finances raised by issuing shares, share capital

Kinds of share

Ordinary sharesPreference sharesRedeemable preference shares

Kinds of shareOrdinary sharesIssue to general public Provides right to share in profit (dividend)Provides right to voteProvides right to attend meetings

Preference sharesIssue to specific parties Provides a specific fixed dividendPayment is made before interest or ordinary dividend Have no voting right

Redeemable preference sharesCompany can redeem at any time

Types of share capital

Authorized (nominal) capitalIssued capitalSubscribed capital Paid up capital Fully paid up capital

Nominal or Authorized capitalThis is the maximum amount of capital which

a company can issue according to its memorandum. It is also referred to, at times, as registered capital. It is the total of the share capital which a limited company is allowed (authorized) to issue. Maximum amount of capital, can be issued

10000 SHARES @ Rs. 10 100000

Share authorized = Shares issued + shares unissued

Issued capital• That part of amount of authorized capital

which is offered by directors or promoters for subscription.

Subscribed capital• The part of amount of issued capital which

is taken by the people.• Amount of capital issued to general public

Paid up capital• That part of subscribed capital against

which money has been received.

Fully paid up capital

Received full nominal value of the shareWith the application for shares