Shares represent the units into which a company’s total share capital is divided. A share is essentially a fractional part of the share capital and signifies ownership interest in the company. Individuals who invest money by purchasing shares are known as shareholders. Password feature is used when a password is required to be shown to the user. X Ltd. issued a prospectus inviting applications for 50,000 equity shares of Rs 10 each payable as to Rs 2 on application and Rs 3.
Short Answer Type Questions
(i) the offer shall be made by notice specifying the number of shares offered and limiting a time not being less than fifteen days and not exceeding thirty days from the date of the offer within which the offer, if not accepted by 90% of its members, shall be deemed to have been declined; (viii) No company offering securities under this section shall release any public advertisements or utilize any media, marketing or distribution channels or agents to inform the public at large about such an offer. However, in case of shares issued to non-resident shall in addition to above comply below provisions. A return of allotment of shares shall be filed with the Registrar within 30 days of allotment in the Form PAS-3 and with the prescribed fees along with a complete list of all security holders containing- The company who fails to allow within the time limit of 180 days from the receipt of the money, may make an application to RBI to grant relaxation on the clause of allotment. Further, if the share is issued to a non-resident then the company shall comply with the provisions of FEMA.
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The assertion (A) is true because companies often use a combined account, the ‘share application and allotment account’, to record both share application and allotment money. Allotment of shares is only possible after an application for shares is made. Conversely, an application for shares without subsequent allotment is pointless as the applicant doesn’t receive any shares.
More Shares Questions
The company issued 6,000 shares to the public payable Rs. 30 per share on application, Rs. 20 per share on allotment, Rs. 30 per share on first call and the balance Rs. 20 on the final call. Make journal entries to record the issue of shares. Describe the provisions of law relating to ‘Calls-in- Arrears’ and ‘Calls in Advance’Answer Calls-in-Arrears The portion of called up capital which is not paid by the shareholder within a specified time is known as calls-in-arrears. If the Article of Association is silent in this regard, then Table A shall be applicable that is interest at 5% pa is charged.It is deducted from the called-up share capital on the liabilities side of the Company’s Balance Sheet. The company can also forfeit the shares on account of non-payment of the calls money after giving proper notice to shareholders.Calls in Advanqe It means calls not due but paid by the shareholder in advance. Thus, the amount of future calls is received in advance by the company.In other words, when a shareholder pays the whole amount or a part of the amount in advance, i.e., before the company calls, then it is termed as calls in advance.
No additional documents or justifications will be admitted after the reception of the application. Connect with our Smart Solutions tutors online and get step by step solution of this question. ETF shares are bought and sold through exchange trading at market price (not NAV), and are not individually redeemed from the fund. Shares may trade at a premium or discount to their NAV in the secondary market. Use this form to establish a Class I share account at John Hancock Investment Management.
- NetBanking is a digital banking facility that allows users to perform a variety of financial transactions online through their bank’s website or mobile app.
- Further, if the share is issued to a non-resident then the company shall comply with the provisions of FEMA.
- At times a company finds that over the years it has introduced many variants of a product in the product line.
Test your Understanding – III
They went for line pruning and now they have around 15 versions. V) Trying to plug holes in the product-line to keep out the competitors The company has 3 choices in naming its down-market products. A company can lengthen its product line in 2 ways viz. A) line stretching and b) line filling. Company objectives influence product-line length.
The number of shares to be issued shall be worked out as follows in different The number of shares to be issued to the vendor will be Calls are important for making shares fully paid up and collecting the full amount from shareholders. Regardless of par or premium, share capital can be collected in instalments at different stages. As the application definition, the shared account should be created for which application it will be created for, and then it should be ready to be assigned when creating the shared account. For example, by creating an institution’s Twitter account as a shared account, it can be shared with the contracted media company/agency during the agreement.
Answer (Detailed Solution Below)
- Software solution India Ltd inviting application for 20,000 equity share of Rs.100 each, payable Rs.40 on application, Rs.30 on allotment and Rs.30 on call.
- I would highly recommend it to any student or professional seeking a dependable tax research portal—TMI is undoubtedly a top choice.
- According to Indian Companies Act, 2013, «Shares means shares in share capital of the company and includes stock except where the distinction between stock and share is expressed or implied.»
- The share capital in a limited company consists of number of shares.
- How are they dealt with in accounting records?
- The Right issue of shares means issue when new shares are offered to the existing shareholders in proportion to their current shareholding.
Here the pattern of entries remains the same. Since there are two separate share capital accounts, it is necessary that the entries for Application Money, Allotment Money and Call Money should be separately passed for each type of Share Capital. Application money received will remain in Share Application Account unless the Board of Directors approve the allotment of shares. Only after the approval, it will be treated as a part of Share Capital. As soon as the allotment is made, the applicants will become share-holders and are legally liable to pay all the amounts due on the shares allotted to them.
The application is an irrevocable offer by me/us. The amount payable on application as shown below is remitted. On allotment, please place my/our name(s) on the Register of shareholder(s). I/We bind myself/ourselves by the provisions as contained in the scheme. In practice, generally excess application money receive on these shares is adjusted towards the amount due on allotment or call.
If you are asking whether NetBanking itself can be «given to» or shared with a share application account, the correct interpretation is that you link or use your bank account through NetBanking to make payments for your share applications. Yes, NetBanking can be used to handle payments for share application accounts, and it is often required to link your bank account to your Demat account for seamless investment in shares. This makes the process of applying for shares faster and more convenient. Ashoka Limited Company which had issued equity shares of Rs.20 each at a discount of Rs. 4 per share, forfeited 1,000 shares for non-payment of final call of Rs.4 per share.
(ii) for the repayment of monies where the company is unable to allot securities. (i) for adjustment against allotment of securities; or (3) All monies payable on subscripttion of securities shall be paid through cheque or demand draft or other banking channels but not by cash.
(ii) Issue Notice for convening Board Meeting at least seven days before the date of meeting for making the proposal for private placement of shares and approval of notice of convening the General Meeting. (i) Check the provision in the Articles of Association of share application account is the Company regarding Private Placement of shares and if the same is not there then the Articles of Association needs to be amended suitably as per the Provisions of the Companies Act, 2013. (v) The number of such offers or invitations shall not exceed 4 in a financial year and not more than once in a calendar quarter with a minimum gap of 60 days between any 2 such offers or invitations.
(c) Allhuwalia Ltd. issued 1,000 equity shares of Rs. 100 each as fully paid-up in consideration of the purchase of plant and machinery worth Rs. 1,00,000. What entry will be recorded in company’s journal. A company forfeited 100 equity shares of Rs.10 each issued at a premium of 20% for non-payment of final call of Rs.5 including the premium.
As per my understanding this amendment is a major amendment introduced in the recent past and impact of this amendment is quite big so it should be taken note off. The funds were credited upon receipt since a combined Share Application and Allotment Account was established. The same account will therefore be debited whether the money is returned or disallowed.