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Procedure of Issue of Shares Video Lecture | Accountancy Class 12 - Commerce

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FAQs on Procedure of Issue of Shares Video Lecture - Accountancy Class 12 - Commerce

1. What is the procedure for issuing shares in a company?
Ans. The procedure for issuing shares in a company involves obtaining approval from the board of directors, preparing the necessary documentation such as a prospectus or offering memorandum, obtaining regulatory approvals, and finally issuing the shares to investors.
2. What are the different types of shares that can be issued by a company?
Ans. A company can issue different types of shares such as equity shares, preference shares, and bonus shares. Equity shares represent ownership in the company, preference shares have preferential rights over equity shares, and bonus shares are issued to existing shareholders as a reward.
3. How does issuing shares help a company raise capital?
Ans. Issuing shares allows a company to raise capital by selling ownership stakes to investors. This injection of funds can be used for various purposes such as expanding operations, investing in new projects, or paying off debt.
4. What is the role of shareholders in a company after shares are issued?
Ans. Shareholders play a crucial role in a company after shares are issued as they have ownership rights, voting rights, and the potential to receive dividends. Shareholders also have the power to elect the board of directors and influence key company decisions.
5. What are the risks associated with issuing shares for a company?
Ans. Some risks associated with issuing shares for a company include dilution of ownership, loss of control, and the potential for shareholder activism. Additionally, if the company's share price declines after issuance, it can impact the company's valuation and reputation.
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