ISSUE OF SHARES,issued at par,premium,discount,oversubscription,under subscription

Issue of Shares comes under Corporate Accounting -1 Unit 1.... Its very basic information about issue of shares, issued at par,Premium. and Discount

1. ISSUE OF SHARES Ms.S.MAHALAKSHMI , ASSISTANT PROFESSOR, DEPARTMENT OF COMMERCE WITH CA, SRI RAMAKRISHNA COLLEGE OF ARTS & SCIENCE, COIMBATORE

2. ISSUE OF SHARES A public company may raise capital by issue of equity shares through the following ways: 1. Public issue Issue of equity shares to the public through prospectus by a public company is called public issue. It includes initial public offer and further public offer. 2. Private placement Private placement means any offer of equity shares or invitation to subscribe to equity shares to a select group of persons by a company (other than by way of a public offer) through the issue of a Private placement offer letter, which satisfies the conditions specified in Section 42 of the Indian Companies Act, 2013. 3. Rights issue Issue of equity shares to the existing shareholders of the company through a letter of offer is known as a rights issue. 4. Bonus issue Issue of equity shares to the existing shareholders of the company at free of cost out of accumulated profit is known as bonus issue

3. Issue of Shares for Immediate Full Consideration In such a type of issue, the full issue value is received at a time. The transaction is completed, without the need for further follow-up action in the future. Consideration receivable can be either of the following : a) Non-cash consideration b) Cash consideration

4. NON-CASH CONSIDERATION

5. Issue of shares to vendors of Business

6. Cash consideration. Companies may issue shares and receive the full amount of the issue in one hump sum. The issue may be at par or at a premium or at a discount

7. CALLS IN ARREAR

8. Forfeiture of Shares Forfeiture of shares means the cancellation of shares held by a shareholder by the company due to non-payment of call money (like allotment or call money), even after repeated reminders. Key Points: Applicable only to partly paid-up shares. Must follow Articles of Association and due procedure. The shareholder loses rights and the amount already paid. Steps: Issue notice to the defaulting shareholder. Wait for the stipulated time (usually 14 days). Pass a resolution for forfeiture. Make necessary entries in the books.

9. Reissue of Forfeited Shares Reissue refers to the sale of forfeited shares to new or existing shareholders, often at a discount. Key Conditions: A discount cannot exceed the amount forfeited. Can be reissued at par, premium, or discount.

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