Share Capital and Debentures Quiz
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Share Capital and Debentures Quiz

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@VersatileErudition

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Questions and Answers

What is the time period permitted for delivery of Certificates of Securities?

  • 90 days from the date of allotment
  • 30 days from the date of allotment
  • 60 days from the date of allotment (correct)
  • 45 days from the date of allotment

    • What is the prohibition on issue of Shares at a Discount?

  • Shares can be issued at a discount to attract more investors
  • Shares can be issued at a discount if approved by the majority of shareholders
  • Shares cannot be issued at a discount except in certain cases specified in the Companies Act (correct)
  • Shares can be issued at a discount if the company is facing financial difficulties

    • What is the purpose of the Capital Redemption Reserve Account?

  • To pay dividends to preference shareholders
  • To redeem preference shares at a premium
  • To provide a buffer against capital losses on the redemption of preference shares (correct)
  • To issue bonus shares to existing shareholders

    • What is the concept relating to Further issue of Share Capital?

    <p>It refers to the issuance of shares to existing shareholders in proportion to their existing holdings</p> Signup and view all the answers

    What is the purpose of Sweat Equity Shares?

    <p>To reward employees for their hard work and dedication</p> Signup and view all the answers

    Study Notes

    Delivery of Certificates of Securities

    • Delivery of Certificates of Securities must occur within a specified time frame to ensure timely communication and legal compliance.

    Prohibition on Shares at a Discount

    • Issuing shares at a discount is prohibited to maintain market integrity, protect shareholders, and ensure fairness during capital raising.

    Capital Redemption Reserve Account

    • The Capital Redemption Reserve Account is established to facilitate the redemption of preference shares and ensures that funds are set aside for this purpose.

    Further Issue of Share Capital

    • Further issue of share capital refers to the capacity of a company to issue additional shares post-initial offering; this can dilute existing shareholders' equity but allows companies to raise additional funds as needed.

    Sweat Equity Shares

    • Sweat equity shares are granted to employees or directors as compensation for their performance and contributions; this incentivizes long-term commitment and aligns interests with company growth.

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    Description

    Test your knowledge of share capital and debentures with this quiz covering topics such as kinds of share capital, issue of share certificates, voting rights, variation of shareholders' rights, calls on unpaid shares, and delivery of certificates of securities. Assess your understanding and enhance your learning outcomes in this important area of corporate finance.

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