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XYZ Ltd is registered with an authorised capital of Rs. 20 lakh divided into 2 lakh equity shares of Rs. 10 each. The company is in manufacturing of pickles and spices. Due to the increase in demand of packed food in the market they decided to diversity its operation. For this purpose they decided to issue 1 lakh equity share of Rs. 10 each. The company issue 20,000 equity shares to a vendor to supply the machinery required to manufacture the packed food. Rest of the equity shares were issued to general public for subscription. The application were received for 46,000 equity shares, Due to undersubscription of equity shares the shares were not issued to public.
Q. The company issued 20,000 equity shares of Rs. 10 each to vendor. After issuing them the shares the vendor will be considered as:
  • a)
    Creditors
  • b)
    Owners
  • c)
    Customer
  • d)
    Lender
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
PassageXYZ Ltd is registered with an authorised capital of Rs. 20 lakh...
Now the vendor will be owner of shares as the company taken machinery against it.
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PassageXYZ Ltd is registered with an authorised capital of Rs. 20 lakh...

Ownership of the Vendor after Issuing Shares:

After issuing 20,000 equity shares of Rs. 10 each to the vendor in exchange for supplying the machinery required for manufacturing packed food, the vendor will be considered as owners of the company.

Explanation:
- When a company issues equity shares to a vendor in exchange for goods or services, the vendor becomes a part owner of the company.
- By issuing equity shares to the vendor, the company is essentially giving the vendor a stake in the ownership and profits of the company.
- This ownership stake entitles the vendor to certain rights, such as voting rights in company decisions and a share of the company's profits through dividends.
- Therefore, in this case, the vendor will be considered as an owner of the company due to their ownership stake acquired through the issuance of equity shares.
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PassageXYZ Ltd is registered with an authorised capital of Rs. 20 lakh divided into 2 lakh equity shares of Rs. 10 each. The company is in manufacturing of pickles and spices. Due to the increase in demand of packed food in the market they decided to diversity its operation. For this purpose they decided to issue 1 lakh equity share of Rs. 10 each. The company issue 20,000 equity sharesto a vendor to supply the machinery required to manufacture the packed food. Rest of the equity shares were issued to general public for subscription. The application were received for 46,000 equity shares, Due to undersubscription of equity shares the shares were not issued to public.Q.The company issued 20,000 equity shares of Rs. 10 each to vendor. After issuing them the shares the vendor will be considered as:a)Creditorsb)Ownersc)Customerd)LenderCorrect answer is option 'B'. Can you explain this answer?
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PassageXYZ Ltd is registered with an authorised capital of Rs. 20 lakh divided into 2 lakh equity shares of Rs. 10 each. The company is in manufacturing of pickles and spices. Due to the increase in demand of packed food in the market they decided to diversity its operation. For this purpose they decided to issue 1 lakh equity share of Rs. 10 each. The company issue 20,000 equity sharesto a vendor to supply the machinery required to manufacture the packed food. Rest of the equity shares were issued to general public for subscription. The application were received for 46,000 equity shares, Due to undersubscription of equity shares the shares were not issued to public.Q.The company issued 20,000 equity shares of Rs. 10 each to vendor. After issuing them the shares the vendor will be considered as:a)Creditorsb)Ownersc)Customerd)LenderCorrect answer is option 'B'. Can you explain this answer? for Humanities/Arts 2024 is part of Humanities/Arts preparation. The Question and answers have been prepared according to the Humanities/Arts exam syllabus. Information about PassageXYZ Ltd is registered with an authorised capital of Rs. 20 lakh divided into 2 lakh equity shares of Rs. 10 each. The company is in manufacturing of pickles and spices. Due to the increase in demand of packed food in the market they decided to diversity its operation. For this purpose they decided to issue 1 lakh equity share of Rs. 10 each. The company issue 20,000 equity sharesto a vendor to supply the machinery required to manufacture the packed food. Rest of the equity shares were issued to general public for subscription. The application were received for 46,000 equity shares, Due to undersubscription of equity shares the shares were not issued to public.Q.The company issued 20,000 equity shares of Rs. 10 each to vendor. After issuing them the shares the vendor will be considered as:a)Creditorsb)Ownersc)Customerd)LenderCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for Humanities/Arts 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for PassageXYZ Ltd is registered with an authorised capital of Rs. 20 lakh divided into 2 lakh equity shares of Rs. 10 each. The company is in manufacturing of pickles and spices. Due to the increase in demand of packed food in the market they decided to diversity its operation. For this purpose they decided to issue 1 lakh equity share of Rs. 10 each. The company issue 20,000 equity sharesto a vendor to supply the machinery required to manufacture the packed food. Rest of the equity shares were issued to general public for subscription. The application were received for 46,000 equity shares, Due to undersubscription of equity shares the shares were not issued to public.Q.The company issued 20,000 equity shares of Rs. 10 each to vendor. After issuing them the shares the vendor will be considered as:a)Creditorsb)Ownersc)Customerd)LenderCorrect answer is option 'B'. Can you explain this answer?.
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