ppt on company

8/3/2019 PPT on Company

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PRESENTATIONON

COMPANY ACCOUNT

Presented By:

Priyanka, Preeti

Jitendra & Naved


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INTRODUCTION OF COMPANY

The industrial revolution brought significant changes in

the size of business structure. The unlimited liability andsmaller size of business units could not meet the hugefinancial requirement of the modern business and providelimited to its members. Joint stock company as a modernform of the business emerged to meet the requirementsof the large sized business. Company in our country aregoverned by the provisions of the Companies Act, 1956.


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MEANING OF COMPANY

A joint stock company is an artificial person, created by law,with a fixed capital, divisible into transferable shares, withperpetual succession and common seal.

The company has a separate legal entity.It must be compulsorily registered.The company is owned by shareholders, who subscribe forits shares.

It is managed by the board of directors, the electedrepresentatives of the shareholders.The company has a permanent life, not at all affected bythe death, insolvency or lunacy of its members.


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KINDS OF COMPANIES

Companies may be classified on the following basis:

A. On the Basis of Incorporation

(i) Chartered companies: Those companies, which areincorporated under a special charter by the king or sovereign

are chartered companies, such as East India Company. Suchcompanies are ready formed now-a-days as tradingcompanies.

(ii) Statutory companies: These companies are formed by thespecial act of the legislatures or parliament e.g. the ReserveBank of India, the Industrial Finance Corporation etc.

(iii) Registered companies: These companies are incorporatedunder the Indian Companies Act, 1956 or were registeredunder the previous Companies Acts.


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B.O

n the Basis of Liability(i) Limited companies: In case of such companies the liability of

each member is limited to the extent of nominal face value of

shares held by him.

(ii) Guarantee companies: The liability of the member of such

companies is limited to the amount which he has undertakento contribute to the assets of the company in the event of its

being wound up. This guaranteed amount is limited by fixedsum which is specified in the memorandum.

(iii) Unlimited companies: A company not having any limit on the

liability of its members is an unlimited company. It may or maynot have share capital.


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C.On the Basis of Transferability of Shares

(i) Private companies:A private company means a companywhich has a minimum paid up capital of Rs. 1 lakh or such

higher capital as may be prescribed and which by its articles:(a) Restricts the right to transfer its shares.

(b) Limits the number of its members to fifty.

(c) Prohibits any invitation to the public to subscribe for any sharesor debentures of the company.

(ii) Public companies:A public company means a company which(a) Is not a private company;

(b) Has a minimum paid up capital of Rs. 5 lakh or such higher paidup capital as may be prescribed;

(c) Is a private company which is subsidiary of a company which isnot a private company.

A public company needs minimum seven persons for its

registration.


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SHARES

The capital of a company is divided into units, calledshares. In other words, shares are the denomination of sharecapital. Funds generated through issue of shares are knownas share capital. In the words of Farwel, A share is theinterest of a shareholder in the company measured by a sum

of money.


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TYPES OF SHARES

Shares are of two types:

a. Equity shares: - A share which is not a preference share is anequity share. It means that if the shareholder is not entitled to afixed dividend in preference to others or if there is not prior

right for the capital to be repaid, the share capital will be treatedas equity share capital.

b. Preference shares: - Preference share are those shares whichare entitled to a priority in the payment of dividends at a fixed

rate, and sometimes also in the return of capital in the event ofthe winding up of the company. The rates of dividend are fixed inthe Articles of Association.


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ISSUE OF SHARES

1. Issue of Shares at parIssue of shares at the face value is a share of Rs. 10 for Rs. 10

or a share of Rs. 100 for Rs. 100 is known as issue of share atpar.

2. Issue of shares at premiumA company can issue its shares at more than its face value .

Excess of issue price of share over its face value is termed as

securities premium.

3. Issue of shares at discountA company can issue its shares at less than its face value.


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DEBENTURE

Debenture is an instrument issued by the companyacknowledging its debts to the holder under its seal.Debenture carries interest at certain percent. As it is a loan

taken by the company, it is repaid after certain specifiedperiod or at the option of the company as per the terms oftheir issue. There are no legal restrictions on the price forwhich debentures are issued. Debentures may be issued at

par, at discount or at premium like shares.


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FEATURES OF DEBENTURE

It is a document which evidences a loan made to acompany.

It is a fixed interest bearing security.

Interest which payable on specified date regardless of thelevel of the profit.

The Original sum is repaid at the specified future date or itis converts into shares or debentures.


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TYPES OF DEBENTURE

1. From the Point of view of Security

Secured Debentures: Secured debentures refer to those

debentures where a charge is created on the assets of thecompany for the purpose of payment in case of default. Thecharge may be fixed or floating.

Unsecured Debentures: Unsecured debentures do not have a

specific a charge on the assets of the company. However, afloating charge may be created on these debentures by default.

Normally, these kinds of debentures are not issued.


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2. From the Point of view of Tenure

Redeemable Debentures: Redeemable debentures are thosewhich are payable on the expiry of the specific period either in

lump sum or in Installments during the life time of the company.Debentures can be redeemed either at par or at premium.

Irredeemable Debentures: Irredeemable debentures are also

known as Perpetual Debentures because the company does notgive any undertaking for the repayment of money borrowed by

issuing such debentures. These debentures are repayable on the

on winding-up of a company or on the expiry of a long period.


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3. From the Point of view of Convertibility

Convertible Debentures: Debentures which are convertible

into equity shares or in any other security either at the option ofthe company or the debenture holders are called convertible

debentures. These debentures are either fully convertible orpartly convertible.

Non-Convertible Debentures: The debentures which cannot be

converted into shares or in any other securities are called

nonconvertible debentures. Most debentures issued bycompanies fell in this category.


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5.From Coupon Rate Point of view

Specific Coupon Rate Debentures: These debentures are issuedwith a specified rate of interest, which is called the coupon rate.

The specified rate may either be fixed or floating.

Zero Coupon Rate Debentures: These debentures do not carry aspecific rate of interest. In order to compensate the investors,

such debentures are issued at substantial discount and the

difference between the nominal value and the issue price istreated as the amount of interest related to the duration of thedebentures.


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.From the view Point of Registration

Registered Debentures: Registered debentures are thosedebentures in respect of which all details including names,

addresses and particulars of holding of the debenture holders are

entered in a register kept by the company.

Bearer Debentures: Bearer debentures are the debentures

which can be transferred by way of delivery and the companydoes not keep any record of the debenture holders. Interest on

debentures is paid to a person who produces the interest couponattached to such debentures.


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REDEMPTION OF DEBENTURE

Redemption of debenture means repayment of debentures.Debentures are the liability of the company so the redemptionmeans the discharge of the liability . Debenture-holders arethe lenders of the company, so their loans must be paid tothem back. This is why, the company while issuing debenturesdescribes the terms, conditions and mode of repayment of

debentures. Redemption means reduction, elimination orcancellation of debenture s to the extent they have beenredeemed.


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THANK YOU

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