share capital and shares - notes - home股本及.DOCVIP

SHARE CAPITAL AND SHARES SHARE CAPITAL The term ‘share capital refers to the amount of capital raised (or to be raised) by a company through the issue of shares. Features of share capital The main features of share capitals are Share capital can be raised only by companies limited by shares and registered with share capital Share capital can be raised by a company either at the time of its formation for starting its operations or later on for further expansion. Share capitals (except in the case of redeemable preference share), one raised, cannot be returned by the company to the shareholders as long as it continues to exist, It can be returned only at time of the winding up of the company. Classes Types or Kinds of Share Capital: The various kinds or sub-divisions of share capital are: Authorised Capital, Registered Capital or Nominal Capital: Authorised capital is the sum stated in the capital clause of the memorandum of association as the capital of a company. It is the maximum amount of share capital, which the company is authorized by its memorandum of association to raise through the issue of shares. It is called authorized capital, because it is the capital, which a company is authorized to raise from the public. It is called registered capital, because it is the capital with which a company is registered. It is also called nominal capital, because it is not the real or actual capital of a company. A company has this capital only in name. Further, it is the total nominal value of the shares, which a company can Issue. Issued Capital: A company, usually, does not need the whole of the authorized capital in the beginning. It needs only a part of the authorized capital. So, in the beginning, it, usually, issues only a part of the authorized capital to the public for subscription. That part of the authorized capital to the public for subscription. The part of the authorized capital which is issued or offered, for the time being, to the public for subs