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प्रश्न
Long Answer Question
What do you mean by the term ‘share’? Discuss the type of shares, which can be issued under the Companies Act, 2013 as amended to date.
उत्तर
The total capital of a company is divided into equal units of small denomination termed as shares. The ownership of these shares is easily transferable, from one person to other, subject to certain conditions. The person who is contributing in the capital in the form of shares is known as shareholder. The ownership of a shareholder is limited to the value of the shares held by him/her.
Types of Shares
As per the Section 44 of the Company Act of 2013, there are two types of shares- Preference Shares and Equity Shares (also known as Ordinary Shares)
i) Preference Shares: Section 43 of the Company Act,2013 defines Preference Shares to be featured by the following rights:
a. Preference Shares entitle its holder the right to receive dividend at a fixed rate or fixed amount.
b. Preference Shares entitle its holder the preferential right to receive repayment of capital invested by them before their equity counterparts at the time of winding up of the company.
ii) Equity Shares: Equity Shareholders have a voting right and control the affairs of a company.
As per Section 43 of Companies Act 2013; equity share is a share that is not a preference share. It does not possess any preferential right of payment of dividend or repayment of capital. The rate of dividend is not fixed on equity shares and varies from year to year, depending upon the amount of profit available for distribution after paying dividend to the preference shareholders.
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संबंधित प्रश्न
Preference shares carry dividend at .......................... rate.
- Fixed
- Fluctuating
- Lower
The type of shareholders who can participate in the management of the company.
Pass necessary journal entries in the following cases
Kay Ltd. converted 3,000, 12% debentures of Rs 100 each issued at a premium of 10% into equity shares of Rs 100 each issued at a premium of 25%.
Jain Motors Ltd. converted its 200, 8% debentures of Rs 100 each issued at a discount of 6% into equity shares of Rs 10 each, issued at a premium of 25%. Discount on issue of 8% debentures has not yet been written off.
Showing your working notes clearly pass necessary Journal Entries on conversion of 8% debentures into equity shares.
Define 'preference shares'. Explain various types of preference shares.
State, with reason, whether the following statement is True or False.
Preference shareholders do not enjoy normal voting rights.
Define Equity Shares and explain its features.
Write notes on Features of equity shares.
State, with reasons, whether the following statement is True or False :
Right shares are issued to the general public.
Write a letter to the debenture holder informing him/her about the conversion of debentures into equity shares.
Write a word or term or phrase which can substitute each of the following statements:
Type of preference shares which can be redeemed after a certain period of time.
What is equity share? Explain the feature of equity shares.
Equity shares are paid dividend at ____________ rate.
Match the correct pairs
| Group A | Group B |
| (a) Fixed Capital | 1) Share Certificate holder |
| (b) Equity share Capital | (2) Share warrant holder |
| (c) Share Certificate | (3) Investment in current assets |
| (D) Debentures | (4) Investment in fixed assets |
|
(e) Dividend warrant |
(5)Redeemable capital |
| (6) Permanent Capital | |
| (7) Bearer Document | |
| (8) Registered Document | |
| (9) Interest | |
| (10) Dividend at a fixed rate |
A company must issue __________ shares.
A limited company offered for subscription of 1,00,000 equity shares of Rs 10 each at a premium of Rs 2 per share. 2,00,000. 10% Preference shares of Rs 10 each at par. The amount on share was payable as under :
|
|
Equity Shares |
Preference Shares |
|
On Application |
Rs 3 per share |
Rs 3 per share |
|
On Allotment |
Rs 5 per share |
Rs 4 per share |
|
|
(including a premium) |
|
|
On First Call |
Rs 4 per share |
Rs 3 per share |
All the shares were fully subscribed, called-up and paid. Record these transactions in the journal and cash book of the company:
Discuss the process for the allotment of shares of a company in case of over subscription.
2,000 Equity Shares of ₹ 10 each were issued to Limited from whom assets of ₹ 25,000 were acquired .
Pass Journal entry.
Rajan Ltd . purchased assets from Geeta & Co . for ₹ 5,00,000. A sum of ₹ 1,00,000 was paid by means of a bank draft and for the balance due Rajan Ltd. issued equity Shares of ₹ 10 each at a premium of 25%. journalise the above transactions in the books of the company.
Jain Ltd purchased machinery costing ₹ 10,00,000 from Ayer Ltd. 50% of the payment was made by cheque and for the remaining 50% , the company issued Equity Shares of ₹ 100 each at a premium of 25% . Pass necessary Journal entries in the books of Jain Ltd . for the above transaction.
Light Lamps Ltd. issued 50,000 shares of ₹ 10 each as fully paid-up to the promoters for their services to set-up the company . It also issued 2,000 shares of ₹ 10 each credited as fully paid-up to the underwriters of shares for their services . journalise these transactions.
Sure Ltd. purchased a running business from M/s. Rai Brothers for a sum of ₹ 15,00,000 payable ₹ 12,00,000 in fully paid shares of ₹ 10 each and balance through cheque.
The assets and liabilities consisted of the following:
| Plant and Machinery | ₹ 4,00,000 | Stock | ₹ 4,00,000 |
| Building | ₹ 4,00,000 | Cash | ₹ 3,00,000 |
| Sundry Debtors | ₹ 3,00,000 | Sundry Creditors | ₹ 2,00,000 |
You are required to pass necessary Journal entries in the company's books.
Sandesh Ltd. took over the assets of ₹ 7,00,000 and liabilities of ₹ 2,00,000 from Sanchar Ltd. for a purchase consideration of ₹ 4,59,500. ₹ 8,500 were paid by accepting a draft in favour of Sanchar Ltd. payable after three months and the balance was paid by issue of equity shares of ₹ 10 each at a premium of 10% in favour of Sanchar Ltd.
Pass necessary journal entries for the above transactions in the books of Sandesh Ltd.
Equity shares and Preference shares.
Explain the features of preference shares.
Answer the question.
Explain the advantages of equity shares, as a source of finance.
Distinguish between equity shares and preference shares.
According to Companies Act company cannot issue its share at ________.
Which is not true about Preference Shares?
What are preference shares?
Ms. Rubina, a first-time investor, does not understand the difference between securities with voting rights and securities without voting rights.
Give any five differences between the two types of securities to help her understand the difference.
