Shares/Debentures Articles

A share that carries the following two preferential rights is called ‘Preference Share’: (i) Preference Shares have a right to receive dividend at a fixed rate before any dividend given to equity shares. (ii) Preference Shares have a right to get their capital returned, before the capital of equity shareholders is returned. ...

Prospectus is an invitation to the public to subscribe for its shares or debentures. A prospectus has been defined as “any document described or issued as a prospectus and included notice, circular advertisement or other document inviting offers from the public for the subscription or purchase of any shares in, ...

The expression ‘Sweat Equity Shares’ means equity shares issued by the company to employees or directors at a discount or for consideration other than cash for providing know-how or making available right in the nature of intellectual property rights or value additions, by whatever name called. The companies will be ...

Expenses incurred to the formation of a company are called ‘Preliminary Expenses’. Preliminary expenses include the following: (a) Expenses incurred in order to get the company registered. (b) Expenses incurred for the preparation, printing and issue of prospectus. (c) Cost of preliminary books and Common Seal. (d) Duty payable on Authorized Capital. (e) Underwriting Commission ...

The capital of a joint stock company is divided into shares and called ‘Share Capital’. The share capital may be classified as below: (1) Nominal: This is the amount of the capital which is stated in Memorandum of Association and with which the company is registered. Nominal capital is the maximum ...

Buy-back means the repurchase of its own shares by the company. When a company has substantial cash resources, it may like to buy its own shares from the market, particularly when the prevailing rate of its shares in the market is much lower that the book or what the company ...

The undistributed profits, after the necessary provisions for taxation, are the property of the equity shareholders and the company for distribution as dividends to them may use the same. But the sound financial policy demands that some of the profits at least must be ploughed back into the business. Thus when ...