PPT - Accounting for Share Capital - Notes | Study Accountancy Class 12 - Commerce

 Page 1


Accounting For Share Capital
Page 2


Accounting For Share Capital
Meaning and Definition of A Company
?
According to Section 2(20) of the Companies Act 
2013:
“Company” means a company incorporated under the 
Act (of 2013) or under any previous company law.
?
According to Chief Justice Marshal (USA):
“A company is a person artificial, intangible and existing 
only in the eyes of law. Being a creature of law, it 
possesses only those properties which the charter of its 
creation confers on it either expressly or incidental to its 
very existence. It has no physical existence but exists 
only in contemplation of law.”
Page 3


Accounting For Share Capital
Meaning and Definition of A Company
?
According to Section 2(20) of the Companies Act 
2013:
“Company” means a company incorporated under the 
Act (of 2013) or under any previous company law.
?
According to Chief Justice Marshal (USA):
“A company is a person artificial, intangible and existing 
only in the eyes of law. Being a creature of law, it 
possesses only those properties which the charter of its 
creation confers on it either expressly or incidental to its 
very existence. It has no physical existence but exists 
only in contemplation of law.”
Kinds of Companies
?
Company limited by guarantee [Section 2(21)]
?
Company limited by shares [Section 2(21)]
?
Unlimited Company [Section 2(92)]
?
Private Company [Section 2(68)]
?
Public Company [Section 2(71)]
?
Government Company
?
Foreign Company
?
Companies with Charitable objects
?
One person company (OPC)
?
Holding and Subsidiary Company
?
Statutory Companies
Page 4


Accounting For Share Capital
Meaning and Definition of A Company
?
According to Section 2(20) of the Companies Act 
2013:
“Company” means a company incorporated under the 
Act (of 2013) or under any previous company law.
?
According to Chief Justice Marshal (USA):
“A company is a person artificial, intangible and existing 
only in the eyes of law. Being a creature of law, it 
possesses only those properties which the charter of its 
creation confers on it either expressly or incidental to its 
very existence. It has no physical existence but exists 
only in contemplation of law.”
Kinds of Companies
?
Company limited by guarantee [Section 2(21)]
?
Company limited by shares [Section 2(21)]
?
Unlimited Company [Section 2(92)]
?
Private Company [Section 2(68)]
?
Public Company [Section 2(71)]
?
Government Company
?
Foreign Company
?
Companies with Charitable objects
?
One person company (OPC)
?
Holding and Subsidiary Company
?
Statutory Companies
Shares – Meaning and Types
?
What is a share?
?
Capital of a company is divided into units or 
parts of equal amount. Every unit/part is 
called a share. 
?
According to Section 2(84) of the Companies 
Act, a ‘share’ means a share in the share 
capital of a company and includes stock.
?
It is an ownership security.
Page 5


Accounting For Share Capital
Meaning and Definition of A Company
?
According to Section 2(20) of the Companies Act 
2013:
“Company” means a company incorporated under the 
Act (of 2013) or under any previous company law.
?
According to Chief Justice Marshal (USA):
“A company is a person artificial, intangible and existing 
only in the eyes of law. Being a creature of law, it 
possesses only those properties which the charter of its 
creation confers on it either expressly or incidental to its 
very existence. It has no physical existence but exists 
only in contemplation of law.”
Kinds of Companies
?
Company limited by guarantee [Section 2(21)]
?
Company limited by shares [Section 2(21)]
?
Unlimited Company [Section 2(92)]
?
Private Company [Section 2(68)]
?
Public Company [Section 2(71)]
?
Government Company
?
Foreign Company
?
Companies with Charitable objects
?
One person company (OPC)
?
Holding and Subsidiary Company
?
Statutory Companies
Shares – Meaning and Types
?
What is a share?
?
Capital of a company is divided into units or 
parts of equal amount. Every unit/part is 
called a share. 
?
According to Section 2(84) of the Companies 
Act, a ‘share’ means a share in the share 
capital of a company and includes stock.
?
It is an ownership security.
Types of Shares
?
Preference Shares
?
Equity Shares:
a. Equity shares issued by a Company limited by 
shares to public or its members [Section 43]
b. Sweat Equity Shares [Section 2(68)]