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

Partnership Vs Limited Liability Partnership (LLP)

♦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

SHARE ALLOTMENT/SHARE CALL

Issue of shares at premium

Issue of shares at discount

Forfeiture of shares

Re-issue of shares

Issue of Bonus shares

♦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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