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Issue, Forfeiture and Re-issue of 
Shares 
Prof Rahul J. Malkan 
 
E-mail : 
rahulmalkan@live.com 
Fundamentals of Accounting – CPT 
Chapter 9 – Unit 2  
Page 2


Issue, Forfeiture and Re-issue of 
Shares 
Prof Rahul J. Malkan 
 
E-mail : 
rahulmalkan@live.com 
Fundamentals of Accounting – CPT 
Chapter 9 – Unit 2  
Introduction 
Accounting 
for Issue 
Forfeiture 
and Reissue 
of Share 
Page 3


Issue, Forfeiture and Re-issue of 
Shares 
Prof Rahul J. Malkan 
 
E-mail : 
rahulmalkan@live.com 
Fundamentals of Accounting – CPT 
Chapter 9 – Unit 2  
Introduction 
Accounting 
for Issue 
Forfeiture 
and Reissue 
of Share 
Page 4


Issue, Forfeiture and Re-issue of 
Shares 
Prof Rahul J. Malkan 
 
E-mail : 
rahulmalkan@live.com 
Fundamentals of Accounting – CPT 
Chapter 9 – Unit 2  
Introduction 
Accounting 
for Issue 
Forfeiture 
and Reissue 
of Share 
Capital 
• Funds provided by the owner(s) into a business 
is known as capital.  
Proprietor 
• Sole - 
Proprietor 
Partnership 
• Partners 
Company  
• Shareholders 
Page 5


Issue, Forfeiture and Re-issue of 
Shares 
Prof Rahul J. Malkan 
 
E-mail : 
rahulmalkan@live.com 
Fundamentals of Accounting – CPT 
Chapter 9 – Unit 2  
Introduction 
Accounting 
for Issue 
Forfeiture 
and Reissue 
of Share 
Capital 
• Funds provided by the owner(s) into a business 
is known as capital.  
Proprietor 
• Sole - 
Proprietor 
Partnership 
• Partners 
Company  
• Shareholders 
Share capital 
• Total capital of the company is divided into a 
number of small indivisible units of a fixed 
amount and each such unit is called a share.  
Share 
Share capital 
Read More
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FAQs on PPT - Issue of Shares - Principles and Practice of Accounting - CA Foundation

1. What is the process for issuing shares?
Ans. The process for issuing shares involves several steps. First, the company must determine the type and class of shares to be issued. Then, the company must obtain necessary approvals from shareholders, board of directors, and regulatory authorities. Next, the company must prepare the necessary documents, such as a prospectus or offer letter, and file them with the relevant authorities. Once all the formalities are completed, the shares can be issued to the investors.
2. What are the different types of shares that can be issued?
Ans. There are various types of shares that a company can issue. Some common types include equity shares, preference shares, cumulative preference shares, redeemable preference shares, and bonus shares. Equity shares represent ownership in the company and provide voting rights to the shareholders. Preference shares, on the other hand, have preferential rights over equity shares in terms of dividend payment and return of capital in the event of liquidation.
3. What are the regulatory requirements for issuing shares?
Ans. Issuing shares involves complying with several regulatory requirements. Companies need to obtain approvals from shareholders, board of directors, and regulatory authorities such as the Securities and Exchange Board of India (SEBI). They also need to prepare and file necessary documents, such as a prospectus or offer letter, with the relevant authorities. Additionally, companies need to adhere to disclosure and transparency requirements to ensure fair and transparent issuance of shares.
4. Can a company issue shares at a premium?
Ans. Yes, a company can issue shares at a premium. When a company issues shares at a price higher than the face value, it is considered as issuing shares at a premium. The premium amount is the difference between the issue price and the face value of the shares. This premium is added to the share capital of the company and can be utilized for various purposes, such as meeting expansion plans or reducing debt.
5. What are the benefits of issuing shares for a company?
Ans. Issuing shares offers several benefits for a company. It allows the company to raise funds for various purposes, such as financing growth, expanding operations, or repaying debt. It also helps in improving the company's capital structure and increasing its net worth. Additionally, issuing shares can attract new investors and provide liquidity to existing shareholders. Furthermore, issuing shares can enhance the company's brand image and reputation in the market.
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