COMPANY ACCOUNTS
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One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What is a company as defined under the Companies Act, 2013?
A company is an artificial juridical person incorporated under the Companies Act with a separate legal identity, perpetual succession, and limited liability for its members.
What is meant by 'paid-up capital' in company accounts?
Portion of subscribed capital actually paid by shareholders.
What are the two main types of share capital a company can issue?
A company can issue equity share capital (ordinary shares carrying voting rights and residual profits) and preference share capital (shares with preferential rights to dividend and capital repayment).
What is a 'reserve capital' and how does it differ from capital reserve?
Reserve capital is uncalled capital reserved for winding up only.
What is meant by 'authorised capital' of a company?
Authorised capital is the maximum amount of share capital a company is legally permitted to issue as stated in its Memorandum of Association; it acts as a ceiling on capital issuance.
What is a prospectus in the context of company share issuance?
A document inviting public to subscribe to company's shares or debentures.
What is the difference between issued capital and subscribed capital?
Issued capital is the portion of authorised capital offered to the public, whereas subscribed capital is the portion of issued capital that has actually been applied for and accepted by investors.
What is the minimum subscription requirement for a company issuing shares?
At least 90% of issued amount must be received within specified time.
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