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Alteration of Share Capital - 2 Video Lecture | Advanced Corporate Accounting - B Com

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FAQs on Alteration of Share Capital - 2 Video Lecture - Advanced Corporate Accounting - B Com

1. What is the process of altering share capital in a company?
Ans. The alteration of share capital in a company involves changing the structure of its share capital by increasing or decreasing the number of shares, changing the nominal value of shares, or converting shares from one class to another.
2. What are the reasons for altering share capital in a company?
Ans. Companies may alter their share capital to raise additional capital, facilitate mergers or acquisitions, restructure their capital base, adjust to changing market conditions, or comply with regulatory requirements.
3. Are there any legal requirements or regulations to be followed when altering share capital?
Ans. Yes, altering share capital involves following specific legal procedures and obtaining necessary approvals from shareholders, regulatory authorities, and possibly the court. Companies must also adhere to the provisions of the Companies Act or relevant legislation in their jurisdiction.
4. How does altering share capital impact existing shareholders?
Ans. Altering share capital can dilute the ownership percentage of existing shareholders if new shares are issued or increase their ownership if shares are bought back. Shareholders may also see changes in the value of their shares based on the alterations made to the share capital.
5. What are the potential consequences of improperly altering share capital in a company?
Ans. Improperly altering share capital can lead to legal challenges, regulatory penalties, loss of investor confidence, and potential damage to the company's reputation. It is crucial for companies to ensure that any alterations to their share capital are done in compliance with the law and best corporate governance practices.
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