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</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</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</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</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</p> Signup and view all the answers

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

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

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

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

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

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

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

    <p>Securities</p> Signup and view all the answers

    In what way do debentures differ from shares?

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

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

    <p>Loans</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.</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.</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.</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.</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.</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.</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</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</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</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</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</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</p> Signup and view all the answers

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