Explains the term Share Capital and its various kinds?

by • 06/01/2013 • GeneralComments (0)352

Q.12 Explains the term Share Capital? Discuss its various kinds?

Ans: SHARE CAPITAL

Share capital means the amount of money which the company is registered and which the company is authorized to rise by issue of shares. Therefore, a company’s capital is called share capital. It has following kinds:

 

REGISTERED OR AUTHORIZED CAPITAL

While granting the approval for company, the registrar fixed the maximum limits of capital to be raised by the sate of its shares. It is called the authorized capital to be raised by the sa1 of its share. It is called the authorized capital as the company is authorized to collect this much maximum capital. For example, if a company is authorized to collect the maximum capital of Rs. 5 lakh it will be called the authorized capital of the said company.

 

ISSUED CAPITAL

The part of capital, which is offered or issued to the public for sate, is known as the issued capital. The total authorized capital is not collected at once; because in the beginning the company goes net require the whole amount. Suppose, a company offers the shares of Rs. 3 lakh out of the total authorized capital of Rs. 5 lakh in the market, Rs. 3 lakh will be called its issued capital.

 

UNISSUED CAPITAL

That amount of authorized capital that is not offered to the public for sate in the form of shares but it can be issued at any time.

 

CALLED UP CAPITAL

That part of the subscribed capital, which is not pad-up by the public, but it remains to be paid and can be called at any time later on, is called the call capital.

 

PAID UP CAPITAL

All the subscribed capital is not actually paid to the joint stock company. Paid-up capital as ht part of subscribed capital, which is actually paid by the people to the company. Suppose, Rs. 1.5 lakh is paid by the public out of the total subscribed capital of Rs. 2 lakh, it will be called the paid-up capital of the company.

 

RESERVE CAPITAL

The capital, which is reserved for unexpected events or for future needs is called, reserved capital.

 

UNCALLED UP CAPITAL

The amount of capital that has not yet been called up by the company is called uncalled capital.

 

CALLS IN ARREAS

If is difference between the called up capital and paid up capital.

LOAN CAPITAL

It is applied to debentures and other loans taken by the company for fix period.

 

CAPITAL ASSETS

The property of the company is called capital assets. ft has two kinds, working capital and fixed capital.

 

SUBSCRIBED CAPITAL

Subscribed capital is that pm of the issued capital of the company which is actually subscribed or purchased by the public in the form of its shares. Suppose, people actually purchase shares of Rs. 2 lakh out of the total issued capital of Rs. 3 lakh, then Rs. 2 lakh will be called the subscribed capital of the company.

 

FIXED CAPITAL

The amount of capital, which has been invested in fixed like land, plant, machinery and furniture, etc. is known as fixed capital. It is a general term and has not been defined in companies’ ordinance 1984.

 

REVOLVING CAPITAL

The amount f capital investment in current assets, f1ating assets or in circulating assets is known as revolving capital, floating or circulating capital. The current assets are those assets, which are kept with the company for sale purchase and not for permanent use in the business. For example, stock in trade, Bank Balance etc. http://eduessayhelper.org/

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