COMPANY LAW

ASSIGNMENT
Submitted by:
Naman Kanwar
B.Com(Hons)
Section A
Semester 3

Submitted To: Miss Divya Verma

 Share capital is the money a company raises by issuing common or
preferred stock. The amount of share capital or equity financing a
company has can change over time with additional public
offerings.The term share capital can mean slightly different things
SHARE depending on the context. Accountants have a much narrower
definition and their definition rules on the balance sheets of public
CAPITAL companies. It means the total amount raised by the company in
sales of shares.
KEY POINTS:
 A company's share capital is the money it raises from selling
common or preferred stock.
 Authorized share capital is the maximum amount a company has
been approved to raise in a public offering.
 A company may opt for a new offer of stock in order to increase
the share capital on its balance sheet.
 KIND OF SHARE CAPITAL:
Authorised, Every company has to specify the amount of capital it wishes to
register within its Memorandum of Association. The amount thus
Nominal or stated is termed as registered, authorised or nominal capital.
Fundamentally, it is the amount of money a company is allowed to
Registered raise through public subscription. Its size can be increased or
Capital decreased as per requirement by meeting the prescribed method.
 It makes up that part of the nominal capital which is offered for
public subscription in the form of shares. It must be noted that a
company may refrain from issuing the entire registered capital at a
single go. Based on their requirement, a company may raise this
Issued Capital: capital from time to time.Under any given situation, issued capital
must not exceed the authorised capital. Generally, it includes all the
shares which have been allotted to vendors, public, signatories of
the memorandum of association, etc.

Typically, it is made up of that portion of nominal capital which is yet

Unissued to be issued. In simpler words, unissued capital can be described as
Capital: the difference between a company’s nominal capital and issued
capital.
 Subscribed capital is a part of issued capital which has been
accepted by the public. The said capital is allotted to each subscriber
Subscribed according to the resolution released by company directors.In a
situation, where the shares allotted by a company are subscribed by
capital: the public, the issued capital and subscribed capital will be the
same. However, it must be noted that subscribed capital cannot
exceed a company’s issued capital.

It forms a part of subscribed capital, which can be called up or

Called-up repurchased by the company. Notably, a company does not call the
Capital: entire value of each share that had been allotted to shareholders. In
fact, only a portion of the amount required by the company is raised
at different intervals.
 It is essentially a part of called-up capital. It signifies the amount of
Paid-up money paid by shareholders in response to the call made by a
company. Usually, the paid-up capital of a company can be
Capital: ascertained by subtracting the outstanding calls from called up
capital.

The said capital comprises fixed assets used in the company. The most
Fixed Capital: prominent examples of fixed capital include – equipment, land,
furniture, buildings, etc.
 This particular capital cannot be called by the company unless it is
winding up or being liquidated. A reserve capital can be created by
passing a special resolution with a 3/4th majority vote in its
Reserve favour.Once created, the Articles of Association cannot be altered to
make the reserve liability available at any given time. It must be
Capital: noted that such capital cannot be pledged as security to secure
loans by the company directors. Also, it cannot be converted into
ordinary capital without receiving the court’s order and is only
available for creditors when a company is winding-up.
DIFFERENCE
BETWEEN
EQUITY
SHARES AND
PREFERENCE
SHARE
 It means an appropriation of a
certain number of shares to an
applicant in response to his
application for shares.
Allotment means distribution
of shares among those who
have submitted written
application.
ALLOTMENT
OF SHARE
 Forfeiture Of shares is referred to as the
situation when the allotted shares are
cancelled by the issuing company due to non-
payment of the subscription amount as
requested by the issuing company from the
shareholder.In the event of forfeiture of
shares, the shareholders loses the rights and
interests of being a shareholder and ceases to
FORFEITURE be a member of the organisation.
OF SHARE
 Reputed companies require the applicants to send the full
value of the shares along with the applications. This is
because, the Companies Act does not prohibit companies
to collect the entire amount at the time of issue itself. But
the usual practice of the companies is to collect a certain
percentage of the face value of the shares on application
CALL ON and allotment and the balance in one or more installments
known as calls.
SHARE
 Surrender of Shares means the surrender of shares already issued to
the company by the registered holder of shares. Where shares are
SURRENDER surrendered to the company, whether by way of settlement of a
dispute or for any other reason, it will have the same effect as a
OF SHARE transfer in favour of the company and amount to a reduction of
capital.
 A Share Warrant is a document issued by the company under its
common seal, stating that its bearer is entitled to
SHARE the shares or stock specified therein. Share warrants are negotiable
instruments. They are transferable by mere delivery without
WARRANT registration of transfer.
Thank You