Company Accounts-1: Jaiib/DBF Paper 2, (Module C), Unit 5
Dear bankers,
As we all know that is Company Accounts-1 for JAIIB Exam. JAIIB exam conducted twice in a year. So, here we are providing the Company Accounts-1 (Unit-5), Final account (Module C), Accounting Finance for Bankers-Paper 2.
♦Company
- A company is an association of persons who contribute money or money’s worth to a common stock and uses it for a common purpose. It is created by law and effected by law. It is a legal person just as much as much as an individual but with no physical existence.
- Section 20 of the Companies Act, 2013, defines a company as A company incorporated under this act, or under any previous company law.
Features of a Joint stock Company
- Incorporated association
- Artificial person
- Perpetual succession
- Common seal
- Limited liability
- Separation of management from ownership
- Transfer ability of shares
- Separate legal status
- Large membership
- Minimum paid up capital: It is Rs 1 lakh Private LTD. Company and 5 lakhs for a Public LTD company.
♦Types of companies
| On the basis of incorporation | On the basis of ownership | On the basis of liability |
| Chartered company | Private company | Company limited by shares |
| Statutory company | Public company | Company Ltd. by guarantee |
| Registered company | Government company | Company with unlimited liability |
| Foreign company | Holding company |
Partnership Vs Limited Liability Partnership (LLP)
| BASIS FOR COMPARISON | PARTNERSHIP | LIMITED LIABILITY PARTNERSHIP (LLP) |
| Meaning | Partnership refers to an arrangement wherein two or more person agree to carry on a business and share profits & losses mutually. | Limited Liability Partnership is a form of business operation which combines the features of a partnership and a body corporate. |
| Governed By | Indian Partnership Act, 1932 | Limited Liability Partnership Act, 2008 |
| Registration | Optional | Mandatory |
| Charter document | Partnership deed | LLP Agreement |
| Liability | Unlimited | Limited to capital contribution, except in case of fraud. |
| Contractual capacity | It cannot enter into contract in its name. | It can sue and be sued in its name. |
| Legal Status | Partners are collectively known as firm, so there is no separate legal entity. | It has a separate legal status. |
| Name of firm | Any name | Name containing LLP as suffix |
| Maximum partners | 100 partners | No limit |
| Property | Cannot be held in the name of firm. | Can be held in the name of the LLP. |
| Perpetual Succession | No | Yes |
| Audit of accounts | Not mandatory | Mandatory, only if turnover and capital contribution overreaches 40 lakhs and 25 lakhs respectively. |
| Relationship | Partners are agents of firm and other partners as well. | Partners are agents of LLP only. |
♦Classes of Share Capital
Share capital of a company limited by shares can be two kinds
- Equity share
- Preference share
Equity share capital means that part of share capital which is not preference share capital. Preference shares can be further classified as under:
- Cumulative
- Redeemable
- Participating
Share capital can be classified in a different way as to:
- Authorised capital
- Issued capital
- Subscribed Capital
- Called up capital
- Paid-up capital
♦Issue of Shares
ISSUE OF SHARE AT PAR
|
Debited …………. |
………….. credited |
|
Debited ………….. |
………. Credited |
Over subscription
|
Debited |
……….. |
SHARE ALLOTMENT/SHARE CALL
|
Debited …………… |
………. Credited |
|
Debited
…………. |
…………
Credited |
|
Debited ………….. |
………… Credited |
|
Debited ………… |
……… Credited |
|
Debited
…………. ……………. |
………….
Credited Credited |
Issue of shares at premium
|
Debited ……………. ……………. |
……………. Credited Credited |
Issue of shares at discount
|
Debited Debited …………… |
………….. …………. Credited |
Forfeiture of shares
|
Debited ……….. ……… |
……… Credited Credited |
Re-issue of shares
|
Debited Debited ……….. ……….. |
………. ………. Credited Credited |
Issue of Bonus shares
|
Debited Debited Debited Debited Debited ……….. |
……….. ……….. ………. ………. ……….. credited |
| · Bonus to shareholders A/c
· Equity share capital A/c |
Debited
………… |
…………. credited |
♦Non- Voting Shares
Section 43 of the Companies Act 2013, Provided that share capital of the company shall consist of the following:
- Equity shares with voting rights
- Equity shares with differential rights as to dividend, voting or otherwise in accordance with such rules as may be prescribed; and
- Preference share capital
The demand for non-voting equity shares has been made by several sections of the industry basically on the ground that they do exist in many other countries and also provide a measure to the management to tap a class of investors who are interested in higher dividend against absence of voting rights.
There are some conditions for issue of non-voting equity share follow:
- Issue of non-voting equity shares shall be authorized by the Articles of Association of the company and approved by the shareholders at their general body meeting by passing a special resolution.
- Special resolution must state the price at which the shares can be issued and higher rate of dividend which non-voting equity shares shall carry.
- Such shareholders are entitled to all rights and bonus shares but do not enjoy voting rights.
- Only 25% of the paid-up capital of the company can be issued as equity shares without voting rights.
- Only a public company limited by shares can issue non-voting equity shares.
- Non company will be permitted to convert shares with voting rights into shares without voting rights.
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