Meaning of Share Capital

As compared to Sole Properitorship and Partnership forms of business, a Joint Stock Company needs a huge capital to invest in its business because of its huge scale of operations. Hence to make it easier to attract investors to come and invest in the company, the capital of the Company is divided into a number of units of smaller denomination called shares. For example, if the total capital of a company is $10,000,000 divided into 1,000,000 units of $10 each, then each unit of $10 is called a share. Shares…

Issue of Shares for Consideration other than Cash

A company can issue its shares either For Cash or For Consideration other than Cash. As is clear from the term itself, Shares issued for consideration other than cash means when shares of the company are issued to somebody for something which is not cash. It can be issue of shares to a vendor against the purchase of assets or it can be issue of shares against the purchase of the entire business of an enterprise. It can also be an issue of shares to the brokers, underwriters in lieu…

Issue Of Shares

Unlike a Sole Proprietorship or a Partnership firm, a Company raises its capital by the issue of shares to the public at large. This offer or invitation to the public by the company is called Initial Public Offer (IPO). Shares of a company can be issued either: a) For Cash, and/or b) For Consideration Other than Cash