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Accounting for Share Capital

Gujarat Board · Class 12 · Elements of Accounts

Quick revision notes for Accounting for Share Capital — Gujarat Board Class 12 Elements of Accounts. Key concepts, formulas, and definitions for last-minute revision.

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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 Notes

Key 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 Accounting for Share Capital — Chapter Overview, Overview of Share Capital - Key Concepts, Accounting for Share Capital - Complete Chapter Overview. These are the concepts Gujarat Board Class 12 examiners draw on most — study them first, then practise related questions.
How to score full marks in Accounting for Share Capital — Gujarat Board Class 12 Elements of Accounts?
Start by understanding all key concepts. Practise previous year questions from this chapter. Revise formulas and definitions regularly. Use flashcards for quick revision before the exam.

Sources & Official References

Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.

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