Understand the various classes of share capital in a limited company:
Authorised, registered or nominal capital is the maximum amount of capital a company is allowed to raise from the public by the issue of share
Issued capital is that part of the authorized capital that is offered to the public for subscription
Subscribed capital is the amount of issued capital that is subscribed by the public
Called-up capital is the amount of issued an subscribed capital that is called up for payment
Uncalled capital is that pat of issued and subscribed capital that has not been called up for payment.
Paid-up capital is that part of called-up capital that has actually been paid
Calls in arrears is the portion of called-up capital that has not been paid.
Ordinary shares are those that receive dividends only after preference shares are paid their fixed rate of dividends
Preference shares earn a fixed rate of dividend and are entitled to profits before ordinary shares
Other terms commonly found in a limited company:
Deferred shares are also called founders’ shares. These shares are entitled to dividends only after preference and ordinary shares are paid a certain rate of dividend
Debentures are loans to the company and are raised upon the security of the assets of the company
Dividend is a share of profits made by the company
Interim dividends are dividends payable before the close of the financial period
Final dividends are dividends declared at the end of the financial period, only after profits are determined.
Understand the feature of a limited company:
- How Do We Classify The Share Capital In A Company?
- Technical Summary Of IAS 33 Earnings per Share
- Details Of Ninth Schedule Companies Act 1965(Act No 125)
- Long Term Sources Of Funds – Types of Share Capital (Part 2 of 3)
- Section 169 Companies Act 1965-Profit & Loss Account, Balance Sheet & Directors' Report