Company & its Capital Structure

Presented By:-Vilas Deshmukh

Abhishek Agrawal

Sub:- Company Accounts

???? COMPANY ???? Definition -

Sec 3(1)(i) and (ii) :- “A Company

formed and registered under this Act or an

existing company. An ‘Existing Company’

means a company formed and registered

under any of the former Companies Act.”

Characteristics

COMPANY

Incorporated Association

Artificial Legal Person

Not aCitizen

Perpetual Existence

Common Seal

Limited Liability

Transferability of Shares

CONCLUSION:-

A Company, thus, may be defined as an

incorporated association, which is an

artificial legal person, having a separate

legal entity, with a perpetual succession, a

common seal, a common capital comprised

of transferable shares and carrying limited

liability.

SHARES

A share is the individual portion of the Company's capital owned by a share holder in the company.

The Act defines a share as a ' share' in the share capital of the company and it includes stock.

Each share has its own distinctive number.

Shares are classified as movable property, transferable in the manner specified by the Articles.

Shares

Equity Preference

Shares Classification :-

Authorized/Registered Capital

Issued Capital

Subscribed Capital

Called up capital

Paid-Up Capital

Unpaid-Capital

Uncalled Capital

Reserve Capital

Unsubscribed Capital

Unissued Capital

Share Capital Structure of Company

SHARE CAPITAL STRUCTURE OF

HINDUSTAN UNILEVER LIMITED

PROCEDURE OF ISSUE OF SHARES

1 • Issue of prospectus

2 • Application received

3 • Allotment of share

4 • calls

11

1) CALLS IN ARREARS.

2) CALLS IN ADVANCE.

3) FORFEITURE OF SHARES.

4) REISSUE OF SHARES.

Other related Terms

ISSUE OF SHARES When Share Application Money is Received:-

Date Particulars L.F

Dr.Amt.

Cr.Amt.

1 By Bank A/c Dr. To Share Application A/c(being application money received)

xxxxx-

-xxxxx

When Share Application Money is Transferred:-

Date Particulars L.F

Dr.Amt.

Cr.Amt.

1 By Share Application A/c Dr. To Share Capital A/c(being application money transferred)

xxxxx-

-xxxxx

When Share Allotment money is Transferred:-

Date Particulars L.F

Dr.Amt.

Cr.Amt.

1 By Share Allotment A/c Dr. To Share Capital A/c(being allotment money due)

xxxxx-

-xxxxx

When Share Allotment Money is Received:-

Date Particulars L.F

Dr.Amt.

Cr.Amt.

1 By Bank A/c Dr. To Share Allotment A/c(being allotment money received)

xxxxx-

-xxxxx

When Share First call money is Transferred:-

Date Particulars L.F

Dr.Amt.

Cr.Amt.

1 By Share First call A/c Dr. To Share Capital A/c(being first call money due)

xxxxx-

-xxxxx

When Share First call Money is Received:-

Date Particulars L.F

Dr.Amt.

Cr.Amt.

1 By Bank A/c Dr. To Share First call A/c(being first call money received)

xxxxx-

-xxxxx

When Share Final call money is Transferred:-

Date Particulars L.F

Dr.Amt.

Cr.Amt.

1 By Share Final call A/c Dr. To Share Capital A/c(being final call money due)

xxxxx-

-xxxxx

When Share Final call Money is Received:-

Date Particulars L.F

Dr.Amt.

Cr.Amt.

1 By Bank A/c Dr. To Share Final call A/c(being final call money received)

xxxxx-

-xxxxx

QUESTION:-

X.Ltd issued 20,000 Equity Shares of Rs.10/- payable as follows-

On Application Rs.2/-On Allotment Rs.3/-On First call Rs.2/-On Final call Rs.3/-

The Company received application for 16,000 Equity shares. All the shares were duly alloted and money due was received.

Pass Journal Entries.

IN THE BOOKS OF X. LTDJOURNAL ENTRIES

Date Particulars L.F Dr.Amt. Cr.Amt.

1)

2)

3)

4)

By Bank A/c Dr. To Share Application A/c(16000 Shares X 2/- per share)(being application money received)

By Share Application A/c Dr. To Share Capital A/c(being application money transferred)

By Share Allotment A/c Dr. To Share Capital A/c(16000 Shares X 3/- per share)(being allotment money due)

By Bank A/c Dr. To Share Allotment A/c(being allotment money received)

32000-

32000-

48000-

48000-

-32000

-32000

-48000

-48000

Date Particulars L.F Dr.Amt. Cr.Amt.

5)

6)

7)

8)

By Share First Call A/c Dr. To Share Capital A/c(16000 Shares X 2/- per share)(being first call money due)

By Bank A/c Dr. To Share First Call A/c(being first call money received)

By Share Final Call A/c Dr. To Share Capital A/c(16000 Shares X 3/- per share)(being final call money due)

By Bank A/c Dr. To Share Final Call A/c(being final call money received)

32000-

32000-

48000-

48000-

-32000

-32000

-48000

-48000

CONT:-

??ANY QUERIES??