Types of share and share capital

PRESENTATION OF BUSINESS LAW FOR BBA

1. Types of shares and share capital

2. Share capital Share 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

3. Kinds of share Ordinary shares Preference shares Redeemable preference shares

4. K inds of share Ordinary shares Issue to general public Provides right to share in profit (dividend) Provides right to vote Provides right to attend meetings Preference shares Issue to specific parties Provides a specific fixed dividend Payment is made before interest or ordinary dividend Have no voting right Redeemable preference shares Company can redeem at any time

5. Types of share capital Authorized (nominal) capital Issued capital Subscribed capital Paid up capital Fully paid up capital

6. Nominal or Authorized capital This 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 @ R s . 10  100000 Share authorized  = Shares issued +  shares unissued

7. Issued capital That part of amount of authorized capital which is offered by directors or promoters for subscription.

8. 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.

9. Fully paid up capital Received full nominal value of the share With the application for shares