Companies Act 2013: Share Capital and Debentures

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Questions and Answers

What is the legal provision covering shares and debentures under the Companies Act, 2013?

  • Chapter V
  • Chapter III
  • Chapter IV (correct)
  • Chapter VI

How are shares and debentures presented in the Balance Sheet?

  • Shares - assets side, Debentures - liabilities side
  • Both on the assets side
  • Both on the liabilities side
  • Shares - liabilities side, Debentures - assets side (correct)

What is the definition of a share according to Section 2(84) of the Companies Act, 2013?

  • An interest measured in a sum of money (correct)
  • A unit of stock
  • A sum of money
  • A contract

How is the capital of a company termed?

<p>Share capital (B)</p> Signup and view all the answers

What rights does a share in a company represent?

<p>Right only to a fixed sum of money (B)</p> Signup and view all the answers

How are shares described in the case New London & Brazilian Bank v. Brockle Bank?

<p>Interest measured in a sum of money (A)</p> Signup and view all the answers

When a company issues shares at a price higher than their face value, what is the differential amount called?

<p>Premium (A)</p> Signup and view all the answers

Which organization's guidelines have to be followed by listed entities regarding issuing shares at par or at premium?

<p>SEBI (B)</p> Signup and view all the answers

In the context of shares, what does AOA stand for?

<p>Articles of Association (D)</p> Signup and view all the answers

What is the Face Value of a share that is issued at a price of ₹14, with a premium of ₹4, according to Example 8?

<p>₹10 (A)</p> Signup and view all the answers

When was the date of listing for Lloyds Luxuries IPO on NSE SME?

<p>October 11, 2022 (C)</p> Signup and view all the answers

What would be the premium charge per share if the Fixed issue price is ₹40 and Face Value is ₹10?

<p>₹15 (C)</p> Signup and view all the answers

What do shares represent in a company according to the text?

<p>Entrepreneurial risks and rewards (A)</p> Signup and view all the answers

What is the main purpose of issuing shares and debentures in a company?

<p>To arrange funds for the company (A)</p> Signup and view all the answers

Under the Companies Act, 2013, what are shares and debentures collectively referred to as?

<p>Securities (D)</p> Signup and view all the answers

In what way do debentures differ from shares?

<p>Debentures have limited risks and returns (D)</p> Signup and view all the answers

What may a company do post issuance of capital based on the text?

<p>Alter or reduce share capital as needed (C)</p> Signup and view all the answers

Which of the following is NOT a financial instrument used by companies to raise funds?

<p>Loans (C)</p> Signup and view all the answers

What is the implication of Richa Daniel not being a holder of 7,000 shares as per the Register of Members?

<p>The transfer to her cousin Stesley is still valid. (B)</p> Signup and view all the answers

What is the alternative for Richa Daniel to become the holder of the 7,000 shares?

<p>Apply to Speed Software Limited with the share certificates and a succession certificate. (C)</p> Signup and view all the answers

Why is there no need to submit a transfer deed in the case of transmission of shares to Richa Daniel?

<p>Deceased persons cannot sign transfer deeds. (D)</p> Signup and view all the answers

What happens after the company scrutinizes the documents submitted by Richa Daniel for share transmission?

<p>Richa Daniel's name gets entered into the Register of Members, and Alexander Daniel's name gets removed. (B)</p> Signup and view all the answers

Why does Richa Daniel need to provide a succession certificate along with the application for share registration?

<p>As proof that she is a legal representative of Alexander Daniel. (B)</p> Signup and view all the answers

What will happen once Richa Daniel is registered as the holder of the 7,000 shares?

<p>The company will issue new share certificates in Richa Daniel's name. (A)</p> Signup and view all the answers

When a company with share capital plans to increase its subscribed capital by issuing further shares, to whom should the new shares be offered first?

<p>To existing equity shareholders (A)</p> Signup and view all the answers

How should the shares be offered to existing equity shareholders in a company?

<p>In proportion to the paid-up capital on their existing shares (D)</p> Signup and view all the answers

What is required for offering further shares to existing equity shareholders in a company?

<p>A special resolution and offer through notice (D)</p> Signup and view all the answers

In the context of issuing further shares, what does 'Right Issue' refer to?

<p>Issuing shares to existing equity shareholders first (B)</p> Signup and view all the answers

What is the significance of a 'Special Resolution' in the context of issuing further shares?

<p>It is required for certain types of offers, like employee stock options (D)</p> Signup and view all the answers

What should a notice specifying the offer of further shares include according to the text?

<p>Both the number of shares to be offered and the time period within which the offer must be accepted (B)</p> Signup and view all the answers

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