Issue of Shares at Discount

Definition and Explanation Shares issued at a discount are priced less than the face value. It is lawful for a company to issue shares at a discount if several conditions are met. The first condition is that the issue of the shares at a discount must be authorized by a resolution passed at the company’s general meeting, and it must be sanctioned by the authority. Second, the above-mentioned resolu…

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Issue of Shares at Premium

Definition and Explanation A company may issue its shares at a premium (i.e., a higher price than the face value), provided there is demand for such shares at a higher value. The premium received on issued shares must not be mixed with the share capital. Instead, it must be credited to a separate account known as the share premium account and shown as a separate item on the liability side of the b…

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Procedure for Issuance of Shares

Explanation and Steps for Issuance of Shares When a company receives its certificate of incorporation, it is important for the company’s directors to take the necessary steps to raise the required capital. A brief overview of these steps is given in this section. Step 1: The directors of a public limited company issue a prospectus, inviting the public to apply to purchase the company’s shares. Ste…

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Types of Shares in a Public Limited Company

Shares: Definition The registered capital of a company is divided into a fixed number of units. Each of these units is known as a share. Companies issue these shares in order to raise capital. Types of Shares There are several types of shares: Ordinary shares Preference shares Deferred shares The rest of this article provides a description of these different types of shares. Ordinary or Common or…

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Issuance of Shares and Debenture MCQs

Take this quick test on the Issuance of Shares and Debentures to help you prepare for your exams and interviews. These multiple choice questions (MCQs) will improve your knowledge and skills. If you find it difficult to answer these questions, read our article on ‘Issuance of Shares and Debentures. To begin, just click on the “Start Quiz” button. Time limit: 0 Quiz-summary 0 of 10 questions comple…

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Issuance of Shares and Debentures: Fill In the Blanks

1. Ordinary shares are also called . See answer 2. Share discounts are shown as separate items on the side of the balance sheet. See answer 3. Calls in arrears are when any installment is not received. See answer 4. The credit balance of forfeited shares must appear as a separate item on the side of the balance sheet. See answer 5. Deferred shares are also called . See answer 6. Naked debentures a…

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