100% found this document useful (1 vote)
4K views26 pages

On Shares

Equity shares represent ownership in a company and provide voting rights to shareholders, who are the residual claimants after other obligations are met. Equity shareholders can influence management decisions and receive dividends if declared by the company based on available profits. Equity shares do not have a fixed dividend or redemption date like preference shares.

Uploaded by

Parth Dahuja
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
100% found this document useful (1 vote)
4K views26 pages

On Shares

Equity shares represent ownership in a company and provide voting rights to shareholders, who are the residual claimants after other obligations are met. Equity shareholders can influence management decisions and receive dividends if declared by the company based on available profits. Equity shares do not have a fixed dividend or redemption date like preference shares.

Uploaded by

Parth Dahuja
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 26

c 

  

   
V A share in the share capital of a company, and
includes stock except where a distinction
between stock and share is expressed or
implied.

V In other words, a share in a company is one of


the units in which the total capital of the
company is divided.

M
V {xample: If the capital of a
company is and is divided
into 
 of  each,
each unit of  shall be called
a share of the company.

î
6 6
m 6 AR{6

 

6 6

  
   





















 

 

 


 
  

  
 


u
V 6  
   
 
›: As to the payment of dividend at a fixed rate
during the life of the company.
2: As to the return of capital winding up of the
company.
V If any share carry only one of above these two
preferential rights, they will be treated as
equity shares.

Ñ
V hey do not enjoy normal voting right like
equity share holders, they are however entitled
to vote in following two cases:
V When any resolution directly affecting their
rights is to be passed.
V When the dividend due (whether declared or
not) on their preference shares or part thereof
has remain unpaid.


V Jumulative preference shares
V Non-cumulative preference shares
V Participating preference shares
V Non-participating preference shares
V Jonvertible preference shares
V Non-convertible preference shares
V Redeemable preference shares
V Irredeemable preference shares

-
›
R hese shares carry the right to receive the
whole of surplus profits after the preference
shares, if any.
R Further, directors have the sole right of
recommending dividends to such shares and as
such they may not get any dividends in case
the director choose so.
R olders of equity shares are the actual owners
of the company.

››
D hey have voting rights in the meeting of the company.
D hey have a control over the working of the company.
D {quity share holders are paid dividend after paying it to
the preference share holders.
D he rate of dividend on these shares depends upon the
profits of the company. hey may be paid a higher rate of
dividend or they may not get anything.
D hese share holders take more risk as compared to
preference share holders.
D {quity capital is paid after meeting all other claims
including that of preference share holders.
D hey take risk both regarding dividend and return of
capital.
D {quity share capital can not be redeemed during the life
time of the company.

›
[  [  
[ !"#"$  #"%&'"#" [
)"#&    ! $"-(#
()* ! ")!+! #!, $##".  !+#' ")!#'"#
,
[ $#%  !/"$ #' [ $(&$##"%  ! - !  
#$' "+   ") $"-(#, !#' ")"+ $(&0"#,

[
( -# #"$ ")$(&#!  [ "&! $#("%$& #
$"-(##"" ( *$ (#!  -#' - #%-#(&"##!"'#0#'
&!"#,  - &+ ,

[ "&!    &"/# ") [ #'("( "( "!' !+! #!
 $"-(#/"+  +"#'', + "% (!& !#'"#$  #+& 
") # -. #!( $&"#,

[
#$ ")(")  "&!   [
#+ "/"!  "#+ #) 
  &'# %/")#$  !  $ /)* !#$"- + #"
!+! #!#!(( $"## +& ") $"#)"$ ,
 ,
›M
[Ê 
     [  
[   ")!+! #!"#  
[      #& !")* !  ! ( #!("# -"#")(")
")!+! #!, +&%& #! )#!  - #")
 $"-(#)")  *(#"# $,
[  !+! #!"#  (!
[ +! #!"#   (!#
"#&)  ( )  #$ !+! #!
( )  #$ "   ,
% #(!,
[ $##"%  ! - !
[ ! -%& ( )  #$  -%  *$ (#! $ - #+"&+#'
 ! - !% $"-(#,  !$"#")$(&"%%$.")
"/# ,

[  +"#''")     [#  "&! $#+" "#&&


 $ !, - )) $#' $"-(#,

[  ( )  #$  + ( )  #$ 


"  / '!"(- #
")$(&"#/#!#'(,

ݔ
D hey are also known as ´founder shares", since
they are often held by the promoter of the
company.
D hey are issued as other ordinary shares and
gets a fixed dividends just like preference
shares.
D But they are the last to receive both as regards
dividends and repayment of capital.

›
D Jertain restriction on public companies
regarding allotment of shares, may be
discussed under the following heads:
D When no public offer is made
D When public offer was made

›u
D Where a public company having a share capital
does not offer shares to the public, it need not
issue a prospectus. In such case it shall not
proceed to allot shares unless at least three
days before the first allotment it has filed with
the registrar for registration a statement in lieu
of prospectus.

D݄
V In case when public company offers shares to
the public for subscription, the provisions
relating to allotment may be studied under the
following heads:
V First allotment of shares
V 6ubsequent allotment of shares

›
‘ A public company can make the first allotment
only after two years of the formation of the
company, and should comply with certain
restrictions:
‘ Registration of the prospectus
‘ Minimum subscription
‘ Application money
‘ {ffect of irregular allotment
‘ 6hares to be dealt in on a stock exchange

›-
V In case of subsequent allotment of shares
Offered to the public for subscription by a
public company, all the special provisions
applicable to ¶first allotment of shares·
discussed above apply, except the provision
relating to:
V Minimum subscription [sec, 69(›)], and
V Deposit of application money in a schedule
bank


V 6hares can be issued at par

V 6hares can be issued at premium

V 6hares can be issued at discount


V {very person whose name is entered as a
member of a company has a right to receive a
certificate of his share.
V A share certificate shall be under the seal of the
company and shall specify:
V he shares to which it relates
V he amount paid up thereon
V he name, address, and occupation of the share
holder.
V 6hould be signed by atleast 2 directors and
secretary.


V A share warrant is a document issued by a
public company stating that its bearer is
entitled to the shares specified therein.
V A public company limited by shares may
convert its fully paid-up shares into share
warrants.
V Advantage of issuing share warrants is that
shares can be transferred by mere delivery of
warrant.

M
V Issue Receipt / acknowledgement
V Use the prescribed format of covering letter
V bear a unique serial number
V Must affix date receipt stamp
V 6hall return share certificates and transfer with
prescribed time of one month


V Not impound certificates
V Dispatch after realization of the stock invest
V {nsure adequate security marks
V 6ignature difference
- Original transfer deed
- Original Jertificate
- Original objection memo with the
reason

u

You might also like