Comapny Accounts : Types of share capital (important topic)

 Types of Share capital

Hlo guys

Welcome back!!!

I know you are waiting for this… you want to know about types of share capital as simple as you learned about what is share. So your wait is over!!!!

Here is what you are searching for:

There are four types of share capital or we can say we can categorise it into four types.

1. Authorised share capital

2. Issued share capital

3. subscribed and fully paid up share capital

4. subscribed but not fully paid up share capital

Now I am explaining each of above into few minutes so listen carefully. Trust me You  will find it simple. Yeahhh it is simple!!!!! So listen,

Your question : What is authorised share capital?

Me : it is that amount of capital beyond which no company can issue it’s share to public at any time. Means company cannot issue shares more than the authorised share capital.
Sounds simple??
 Great !!!!!
It is also known as Registered capital or nominal capital. It is showed in share capital under the major head shareholder’s fund but it is not added into share capital it is just showed or presented there.

Your question : What is issued share capital ?

 Me: it is that portion of authorised share capital which is to be issued by the company into public at large. So it cannot be more than the authorised share capital of the company.
Suppose company have authorised share capital of 20 lakhs then company can not issue more than that of. If company really wants to issue more shares then it has to revise the limits under Memorandum of association of companies , company has to raise authorised share capital by passing special resolution as per companies act.

  
 Your question : what is subscribed and fully paid up share capital?

Me:  it is that portion of issued share capital which is subscribed by the public and the public has paid that whole amount which is demanded or called up by the company. Suppose company has issued shares of Rs. 18 lakhs and the company called up Rs. 16 lakhs upto the date, and  share holders has paid up only Rs. 15 lakhs then issued share capital is Rs. 18 lakhs , subscribed and called up share capital is 16 lakhs but subscribed and fully paid up is only Rs. 15 lakhs. 

Your question : what is subscribed and not fully paid up share capital?

Me: it is that portion of subscribed and called up capital which is unpaid by the public till date. As in above example Rs. 1 lakh ( which is 16 lakhs minus 15 lakhs ) is subscribed and not fully paid up share capital.

 It has finished now…..??????????????????????????????????

No, not now

This is my turn you have asked me many questions now I am going to ask you one question which you have to solve on your notebook.

Q.1 Soham Ltd. was formed with share capital of Rs. 15,00,000 divided into equity shares of Rs.10 each. Out of these 6,000 shares were issued to the vendors as fully paid as purchase consideration for a building acquired and 3,000 share were issued to signatories to Memorandum of Association as fully paid. The directors offered 19,500 shares to public and called up Rs. 6 per share and received the entire called up amount on shares alloted. Show how share capital will appear in the balance sheet of the company. Also prepare notes to accounts

If you face any problem to this question you can write us at shivamsir009@gmail.com I will give you the actual solution to this problem.

Yeah I know !! you will say,” it was so simple as you have never thought before” yeah this article is knowledgeable also. It will surely build up your understanding about shares and companies .

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Thank you 

Yours

Shivam garg

Team Go commerce