VARIOUS KINDS OF SHARE CAPITAL

-

 VARIOUS KINDS OF SHARE CAPITAL




Share capital is the money that has been raised by a company by issuing shares to investors, which can be divided into various types—all of these will serve different purposes and will also have different characteristics:


1. Authorized Share Capital: It denotes the highest share capital that a company can issue to its shareholders based on the constitutional documents. It sets a limit after which the company cannot issue shares without amending the charter.


2. Issued Share Capital: It's that portion of authorized share capital that has actually been issued to shareholders. All those shares, which have been allotted to shareholders, whether fully paid or not, fall under this category.


3. Subscribed Share Capital: This is a part of the issued share capital that the investors have irrevocably promised to purchase and undertaken to pay for. This shows the amount of interest and demand that the investors have exhibited in the company's shares.


4. Paid-up Share Capital: This refers to the exact amount that shareholders have paid to the company against their shares. In other words, it is a subset of the subscribed share capital, and therefore, it further specifies the funds received by the company.


5. Called-up Share Capital: It is that part of the paid-up share capital on the share that the company calls upon the shareholder to pay.


6. Uncalled Share Capital: This is the value of shares on which the company has not yet called in payment. This is the amount on which the company has not yet demanded money, and so it stays a probable future fund for the company from the shareholders.


7. Equity Share Capital: These are shares indicating ownership in the company and hence offer voting rights to their owner or instrument holders, while giving a claim on its profits through dividends. In most cases, there are no fixed dividend rates attached to equity shares, and returns are solely dependent on the firm's performance.


8. Preference Share Capital: These types of shares confer their holders relative advantages over equity shareholders, mainly concerning the receipt of dividends and return on assets liquidated at winding-up. Preference shares generally enjoy a fixed rate of dividend and do not carry voting rights except in special cases.


Understanding these types of share capital is very important in understanding a company's financial structure, its strategies on raising finance, and the various rights and obligations of shareholders.

follow us:





Comments

Post a Comment

Popular posts from this blog

EXPLANATION OF PLANNING AND ITS FEATURES

-
Image
 EXPLANATION OF PLANNING AND ITS FEATURES Planning, therefore, is the process of pre -deciding about what is to be done and how it can be organized and arriving at a decision on how best to do it so that certain goals or objectives can be achieved. It is the course of actions taken toward the future by considering alternatives and then making a determination on the best course of action to realize the desired end result. Basically, it involves designing a roadmap that can act to manage and direct actions and decisions toward success. Planning is a crucial process in both personal and professional contexts, involving the formulation of a detailed strategy or plan to achieve specific goals or objectives. Here’s an overview of the key aspects of planning:   Definition Planning is the process of thinking about the activities required to achieve a desired goal. It involves the identification of resources, setting objectives, and determining the steps necessary to reach those objec...
Read more

What Is Staffing? Meaning, Importance, Process

-
Image
 What Is Staffing? Meaning, Importance, Process Staffing is the managerial function that consists of planning, recruitment, selection, training, and development of employees within an organization. It means basically identifying the requirement of human resources for performing various tasks in any organization.  This includes attracting suitable candidates and ensuring they are placed in roles wherein they would prove most effective. It is a principal or primary function of management, which ensures that proper people with proper skills are available at proper places and proper time. Key elements of the process of staffing would include:   Workforce Planning: Determination of the size and type of workforce an organization should possess to achieve the organizational goals. Recruitment: The process of attracting candidates with the required qualification to apply for jobs Selection: The process of generating applicants for available positions in an organization, then e...
Read more

14 PRINCIPALS OF MANAGEMENT BY HENRY FAYOL

-
Image
 14 PRINCIPALS OF MANAGEMENT BY HENRY FAYOL The principles of management imply the starting principles or rules on which effective management practices are founded. They are deduced from experiences, observations, and analyses of successful management practices that provide a framework for managers to understand, predict, and influence organizational behavior. Such principles facilitate managers in attaining organizational goals efficiently and effectively by providing insights into how to manage people, processes, and resources. Henri Fayol was a French mining engineer and management theorist who developed 14 principles of management in the early 20th century. These principles have been such that they served as a guide to managers in managing organizations efficiently and effectively. The detailed explanation of each principle is given below: 1. Division of Labor: Specialization increases the output of the workforce due to the reason that every worker performs specific tasks. Divi...
Read more