SHARE CAPITAL

Authorized or Nominal capital: As authorized by MOA Issued & subscribed: Offered to public taken up. Called up: Which has been called up on the shares Paid up: Part of Issued capital which has been paid up. Uncalled Capital : Not yet called Reserve capital: to be called on winding up.KINDS OF SHARE CAPITAL: Equity share capital: with voting rights OR with differential rights as to dividend, voting, or otherwise as per the Act.Preferential share capital: that part of the capital which carries a preferential right as to payment of dividend and repayment of capital on winding up.

ALTERATION OF SHARE CAPITAL: If authorized by AOA, a Co. can increase by issue of new shares, consolidate and divided any part of its shares, convert fully paid up shares into stock and vice versa, subdivide its shares, cancel shares which have not been taken up and reduction of share capital.

Allotment PUBLIC OFFER & FIRST ALLOTMENT: Registration of Prospectus, Shares in Demat form, Minimum subscription : 90%, Application money shall not be less than 5% of the nominal amount of shares, Amount collected should be deposited in a separate Bank a/c., Subscription must be kept open for least 3 working days, allotment can be made only after beginning of the 5th day from the date of issue of prospectus, shares must be listed in SE, to return of excess amount, Return of allotment.RIGHTS ISSUE: Right of pre-emption of existing shareholders. Such shares must be offered to them first.ALLOTMENT OF SHARES: The general principles of allotment are : 1) Proper authority - Board of directors, 2) Within reasonable time, 3) Communication, 4) Absolute and unconditional 5) Revocation can be done by the applicant before letter of allotment is posted

TRANSFER, TRANSMISSION & FORFEITURETRANSFER OF SHARES: As prescribed in Act and AOA. Board of Directors are given the powers. Co. to maintain proper records and file necessary returns. PROVISIONS: 1) Properly executed transfer form and share certificate to be submitted, 2) Application for transfer 3) If refused, can appeal.TRANSMISSION OF SHARES: On the death of member, his legal rep. shall send to Co. share certificate, death certificate and notice in writing signed by legal rep. for transfer of shares to his name. FORFEITURE: If the shareholders fails to pay the call money within the stipulated time, shares can be forfeited after giving proper notice to them.CONDITIONS FOR FORFEITURE: As per AOA, notice, resolution of board, and in good faith.

DIVIDEND & BONUS SHARES

DIVIDENDS : Board of Directors to decide %. To be declared at the AGM and passed members cannot increase but can reduce %, there is NO absolute right to dividend. It is in proportion to paid up capital, only out of profits, transfer 10% of profits to reserve a/c, paid in cash only. Bonus shares: Companies accumulate the profits over the years as reserves. If AOA permits these accumulated reserves can be converted into share capital and issued as Bonus shares (free shares) to its existing shareholders.CAPITALIZATION OF PROFITS: A Co. in the general meeting on the recommendation of Board shall resolve: to distribute to its members dividend, such free distribution shall NOT be paid in cash, it can be by paying up unpaid amount on any share, credited as fully paid shares to members.

DEMATDEMATERIALISATION OF SHARES: Dematerialisation is the process by which shares in the physical / paper form are cancelled and credit in the form of electronic balances are maintained on highly secure systems at the depository.

TEST ON 28.07.2010 SEC. A & B TEST ON 30.07.2010 SEC. C ALL THE BEST