By going through these Maharashtra State Board Secretarial Practice 12th Commerce Notes Chapter 3 Issue of Shares students can recall all the concepts quickly.

Maharashtra State Board Class 12 Secretarial Practice Notes Chapter 3 Issue of Shares

→ A joint-stock company can raise its capital by issuing shares, debentures, inviting public deposits, taking loans etc.

→ Share Capital refers to the capital made up out of equity shares and preference shares.

Share Capital can be classified as –

  • Authorised or Nominal or Registered Capital
  • Issued and Unissued Capital
  • Subscribed and Unsubscribed Capital
  • Called up and uncalled Capital and Reserve Capital
  • Paid up Capital and Calls in Arrears

Company can raise capital by selling shares in the market. Generally it issues –

  • Equity shares
  • Preference shares.

A company can use the following methods for issues of shares –

  • Public Issue
  • Fixed price issue method
  • book building method
  • Initial public offer
  • Further public offer
  • Rights issue
  • Bonus issue
  • Employee stock option scheme
  • Employee stock purchase scheme
  • Stock appreciation rights scheme
  • Sweat equity shares
  • Private placement

Preferential allotment-

Allotment of Shares:
The Supreme Court has defined allotment as “the appropriation out of the previously unappropriated capital of the company of a certain number of shares to a person.
Thus allotment of shares means allotting shares to an applicant based on the application submitted.

Share Certificate:
It is a registered document issued by a company which is an evidence of ownership of specified number of shares of the company. Share certificate should be issued by the company within two months.

Calls on shares:
Besides the application money and allotment money, if a company demands the balance unpaid amount on shares it is called as calls on shares. It is unpaid money demanded by the company.

Forfeiture of Shares:
If a shareholder fails to pay calls on shares within a certain period, the Board of Directors can forfeit the ownership of a member which is called forfeiture of shares. It is a forceful act by the company. Here membership is terminated by the company.

Surrender of Shares:
Voluntary return of shares by the member to the company for cancellation of shares is called surrender of shares.

Transfer of shares:
Transfer of shares means voluntary transfer of shares by a member of a company in favour of another person against consideration. It is a voluntary activity.

Transmission of shares:
When the shares of a member is automatically transferred to the nominee or legal heir on the death, insolvency or insanity of a member, it is called transmission of shares. It is performed by operation of law.