Joint Stock Accounts : Issue of Share — Flashcards

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A company is an incorporated association of persons formed or carrying on business. It is an artificial person created by law, separate from its members, with perpetual succession and a common seal.

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Limited liability means a shareholder’s liability is limited to the unpaid amount on the shares held by that shareholder. Personal property is not used beyond that unpaid amount.

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A share is a part of the share capital of a company. It represents ownership in the company. A company may divide its capital into shares of ₹1, ₹2, ₹5, ₹10, ₹50, ₹100, or any suitable amount.

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An equity share is a share that is not a preference share. It does not carry a fixed dividend rate. Dividend and return of capital come after preference shareholders. Equity shareholders usually have …

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A company can issue two types of shares: Preference shares and Equity shares. Preference shares have priority in dividend and capital repayment; equity shares do not have that priority.

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A preference share has a fixed dividend rate and gets dividend before equity shares. It also gets return of capital before equity shares on winding up. Generally, preference shareholders do not have v…

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Authorised capital is the maximum amount of share capital a company is authorised by its memorandum to raise. It is also called registered capital or nominal capital.

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Issued capital is the part of authorised capital offered to the public for subscription. It also includes shares offered to vendors for consideration other than cash.