COMPANY ACOUNTS
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What is a company account and how does it differ from a sole trader account?
A company account is a financial statement prepared for a corporate entity incorporated under the Companies Act, whereas a sole trader account is prepared for an individual business owner. Companies have separate legal identity, limited liability, and must follow statutory disclosure norms under Schedule III of the Companies Act 2013.
What is the minimum number of members required to form a public company?
Seven members are required to form a public company.
Which schedule of the Companies Act 2013 prescribes the format for company financial statements?
Schedule III of the Companies Act 2013 prescribes the format for the Balance Sheet and Statement of Profit and Loss for companies. It mandates specific line items, classification, and disclosure requirements for presenting financial information.
What is the minimum paid-up share capital required for a private company under Companies Act 2013?
No minimum paid-up capital is prescribed under Companies Act 2013.
What is the distinction between authorised capital and issued capital of a company?
Authorised capital is the maximum amount of share capital a company is permitted to raise as stated in its Memorandum of Association. Issued capital is the portion of authorised capital that has actually been offered to the public or shareholders for subscription.
What does 'subscribed capital' mean in the context of company share capital?
Subscribed capital is the portion of issued capital applied for by the public.
What does 'calls in arrears' mean in the context of share capital?
Calls in arrears refers to the amount called up on shares by the company but not yet paid by the shareholders. It is shown as a deduction from the called-up share capital on the liabilities side of the Balance Sheet.
What is 'paid-up capital' in company accounts?
Paid-up capital is the amount actually received from shareholders on shares.
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