shares,stocks

8/3/2019 shares,stocks

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Presentation on

1.Allotment of Shares2.Shares &Share

Capital3.winding up

Presented by-Pawan Sharma

Sec-A

Sem-ll


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Definition of allotment

The term allotment has not been defined

in the companies act. But allotment meansappropriation of certain number of shares

to a certain persons out of inappropriatedshares of the company.

But it should be noted that re-issue of

forfeited of shares is not the allotment ofshares.


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Minimum subscription

No company can allot the shares to thepublic if it does not receive the amount of

minimum subscript till the date of closureof the subscription list.

But, now under the SEBI regime the

promoters, directors etc do not decide theamount of minimum subscription.


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Irregular Allotment

An allotment made by a company incontravention of the provisions of section69 or 70 is an irregular allotment.

An allotment is irregular in any of thefollowing cases-

1)If the allotment is made before or withoutreceiving the minimum subscription.

2)If the allotment is made without receiving


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at least 5 per cent of nominal value ofshares application money in cash

3)If the allotment is made without depositingand keeping deposited application moneyin a scheduled bank.

4)If the allotment is made on oral applicationor made without written application


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WHAT IS SHARE

A Share means a share in the share

capital of a company and includesstock except where a distinctionbetween stock and shares is expressed

or implied [section 2 (46) ].


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Cont.

A Share thus represents suchproportion of the interest of theshareholders as the amount paid up

thereon bears to the total capitalpayable to the company. It is a measureof interest in the companys assets to

which a person holding a share isentitled.


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What is stock

STOCK is an aggregate of fully paidshares that have been legallyconsolidated. The consolidated amount

is divisible into fractions of anyamount, regardless of the nominalvalue of the shares that have been

consolidated. It thus represents a partof the capital of the company which isfully paid.


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Types of share CAPITAL

EQUITY PREFERENCE


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EQUITY SHARES

Equity shares are those shares , whichare not preference shares It means thatthey do not enjoy any preferential

rights in the matter of payment ofdividend or repayment of capital.


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Preference shares

According to the section 85 of theCompanies Act , 1956, persons holdingpreference shares, called preference

shareholders, are assured of apreferential dividend at a fixed rateduring the life the company.


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Cont.

They also carry a preferential right overother shareholders to be paid first incase of winding up of the company.

Thus, they enjoy preferential rights inthe matter of-

(A)Payment of dividend, and

(B)Repayment of capital


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Difference between shares andstock

.

SHARES

1.They are the smallest

part of share capital

of the company.

2. Shares can be fullypaid up or fully paid

up.3. They have nominal

value.

STOCK

1.They are bundle of

shares.

2.It is always full paid

up.

3.Not applicable.


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Cont.

4. They can be

transferred only

entirely or in

multiples.

5. Public and private

companies can issueshares.

6. They can be issued

originally.

4. They can be transfer

in fractions.

5. Can be issued only by

a public company.

6.Fully paid up shares

converted into stock.


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Difference betweenpreference and equity shares

PREFERENCESHARES1. They are assured of a

preferential dividend

at a fixed rate duringthe life of the

company.

2. They enjoy a

preferential right in

the matter of payment

of dividend.

EQUITY SHARES

1.The rate of dividend on

equity shares may

vary year to year.

2.They do not enjoy apreferential right in

the matter of payment

of dividend.


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3. They also enjoy apreferential right in

the matter of

repayment of

capital in case ofwinding up of a

company.

4.Generally holders of

these shares do not

get voting rights

3.Not enjoy the same

4.These shares carry

voting rights.

MEANING Wi di f


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MEANING: Winding of aCompany

Winding up of a company is the stage ,where by the company takes its last

breath.

It is a process by which business of thecompany is wound up, and the companyceases to exist anymore.

All the assets of the company are sold,and the proceedings collected are used to

discharge the liabilities on a priority basis.


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CHARACTERISTICS

Winding up is a process.

Winding up process is carried out by a

liquidator. The liquidator realizes the assets of the

company, pays the debts and distributes

surplus, if any among the members.Winding up of a company does not

imply insolvency of the company.

Winding up always precedesdissolution.

DIFFERENCE


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DIFFERENCES.N.

Basis Winding up Dissolution

1. Meaning It is a processwherebydissolution of acompany is

brought about

It is the stage ofcompany when tbusiness affairsthe company ha

been completelywound up

2. Legal existence During the processof winding up acompany exists inthe eyes of law

Dissolution putsend to the existeof a company

3 Suit against company During the processof winding up acompany may be

sued in court of law

After dissolutioncompany can nosued because it

ceases to exist i


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THANK YOU ANDENJOY YOUR DAY .


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