Pramila Rai

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Define share capital. Differentiate between issued capital and subscribed capital.

The capital contributed by shareholders of a company for its business operation is known as share capital.

Issued capital	Subscribed capital
Issued capital is a part of authorized capital which is offered to the public for subscription, including shares offered to the vendor for consideration other than cash .	Subscribed capital is the part of issued capital, which is subscribed by the public.
Issued share capital is the value of shares actually held by investors.

What is preference shares? State the features of preference shares.

The share, which carries preferential rights on dividend and refund of capital on case of liquidation of company,is called preference share.

It's features are:

1. Dividend at a fixed amount is given to preference shareholders before any dividend to equity share.

2. Redemption of preference shares capital before the redemption of equity share capital at the time of liquidation of the company .

3.Preference shareholders do not have right to participate in the management of the company.

What do you mean by company promoters? Write the functions of company promoters.

The person or a group of persons who take necessary steps to incorporate a company are called a company promoters.

The functions of company promoters are:

1. Conceive the idea of forming a business.

2. Analyse profitability and feasibility of the idea.

3. Investigate the workability of the idea by consulting experts.

4. Decide the name and the location of the company and also the amount and form of its share capital.

5. Prepare the Memorandum of Association (MoA), Article of Association (AoA),...

What do you mean by prospectus? Mention any five contents to be stated in prospectus.

A prospectus is a written invitation made to the public to subscribe the shares and any other securities of a company.

The important contents to be included in the prospectus are as follows:

1.The name , address,nature and objectives of the company.

2.The names, addresses and occupations of the directors, managing directors or managers,etc.

3. Dates of opening and closing subscription list.

4. Capital structure of the company as authorised,issued , subscribed and paid up share.

5. Terms of...

What do you mean by private company? Write any five privileges of private companies.

A company is said to be a private company if it restricts the right of its members to freely transfer shares,limit the number of its members one to one hundred one and does not invite public to subscribe for shares or debentures by issuing prospectus.

Privileges of private company

a. Formation by a a single person: A private limited company may be formed even by a single person.

B. Commencement of business:It can start it's business immediately after getting certificate of incorporation.

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