What is a share in 12th accounts?
i. As per section 2(20) of the Companies Act, 2013, “Company means a company incorporated under this Act or any previous Company Law.” A company is divided into units called shares, the owners of which are known as members or shareholders.
What is share capital of a company class 12?
6. Share Capital It is that part of the capital of a company, which is represented by the total nominal value of shares, which it has issued.
How do you record share capital in accounting?
Ordinary Share Capital represents equity of a company and therefore its issuance is recorded as part of the equity reserves in the balance sheet….Initial Issue.
|Credit||Share Capital Account||Amount up to nominal value|
|Credit||Share Premium Account||Amount in excess of nominal value|
What is the maximum amount of share capital?
The authorised capital of a company is the maximum amount of share capital for which shares can be issued by a company. The initial authorised capital of the Company is mentioned in the Memorandum of Association of the Company and is usually Rs. 1 lakh.
What type of account is share capital?
Share capital (shareholders’ capital, equity capital, contributed capital,Contributed SurplusContributed surplus is an account in the shareholders’ equity section of the balance sheet that reflects excess amounts collected from the or paid-in capital) is the amount invested by a company’s shareholders for use in the …
What is the journal entry for share capital?
|Debit||Cash or other item received||(shares issued x price paid per share) or market value of item received|
|Credit||Common (or Preferred) Stock||(shares issued x PAR value)|
|Credit||Paid in capital in excess of par value, common (or preferred) stock||(difference between value received and par value of stock)|
Who is the owner of company Class 12?
The law considers a company as an artificial legal person. A Company is a separate legal entity from its owner (shareholders).
What is the journal entry for capital?
When you record the journal, you enter the capital introduced as a credit and post the opposite debit entry to the nominal ledger account you want to affect.
What are the advantages of share capital?
Advantages of share capital include: Share capital is a source of permanent capital – Shareholders cannot have a refund on their shares. Instead, if they want to sell their shares, they must find someone else to sell them to.
Which is the one part of share capital?
As per section 43 (a) equity share capital may be divided on the basis of voting rights and differential rights(DVR) as to dividend, voting rights or otherwise according to the rules.
What can share capital be used for?
Share Capital / Statement of Capital The purpose of the share capital is really to enable the company to be divided up in terms of ownership and control. The shareholders are granted options over the shares and the percentage of issued shares they own represents their holding in the company.