Chapter 2 of 13
Revision Notes
Accounting for Share Capital — Revision Notes
Gujarat Board · Class 12 · Elements of Accounts
Accounting for Share Capital revision notes for Gujarat Board Class 12 Elements of Accounts: 4 topics in quick points.
2 formulas & key relations5 concepts
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Key Topics to Revise
1
Types of Companies and Shares
- Two main types of registered companies: Private Company (minimum 2 members, maximum 200, name ends with 'Private Limited') and Public Company (minimum 7 members, no maximum, name ends with 'Limited').
- One Person Company (OPC) is a special type of private company with only one member.
- Companies can also be classified by liability: Limited by Shares, Limited by Guarantee, and Unlimited Liability.
2
Types of Share Capital
- Authorised/Nominal/Registered Capital: Maximum capital a company can raise; stated in Memorandum of Association.
- Issued Capital: Part of authorised capital offered to the public; cannot exceed authorised capital.
- Subscribed Capital: Part of issued capital for which applications are received; can be less than or equal to issued capital.
3
Steps for Issue of Shares and Methods of Issue
- Permission from SEBI is required for public issue of shares; offer document must be submitted to SEBI.
- Company invites public through a Prospectus; details include authorised capital, issue price, dates, merchant bank details, etc.
- Application money: Minimum 5% of face value (as per Companies Act 2013, Section 39) OR minimum 25% of issue price (as per SEBI rules).
4
Share Capital Transactions and Accounting Entries
- Share Application: Bank A/c Dr → Share Application A/c Cr
- On Allotment Decision: Share Application A/c Dr → Share Capital A/c Cr (transfer of application money)
- Refund of excess application money: Share Application A/c Dr → Bank A/c Cr
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Full NotesKey Concepts
Companies are broadly classified as StatutoryShare capital is the total capitalShare capital is categorised intoThe process involvesOver Subscription
Frequently Asked Questions
What are the important topics in Accounting for Share Capital for Gujarat Board Class 12 Elements of Accounts?
Key topics in Accounting for Share Capital include Types of Companies and Shares, Types of Share Capital, Steps for Issue of Shares and Methods of Issue, Share Capital Transactions and Accounting Entries. Study these first, then practise questions on each for the Gujarat Board Class 12 board exam.
Sources & Official References
Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.
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