Company Accounts — Issue of Shares

Core concepts

1. 01Share capital: Authorised, Issued, Subscribed, Called-up, Paid-up.
2. 02Issue at par, premium (Sec 52), or discount (only sweat equity under Sec 53).
3. 03Stages: Application, Allotment, Calls — money received in instalments.
4. 04Calls in Arrears: unpaid called-up amount; Calls in Advance: paid before call.
5. 05Forfeiture: cancellation for non-payment; re-issue at any price (discount ≤ forfeited amount).

Exam-critical pointers

• ⭐Securities Premium uses (Sec 52): bonus issue, write-off preliminary expenses, premium on redemption, buy-back.
• ⭐If pro-rata allotment, excess application money adjusts towards allotment then calls.
• ⭐Re-issue at discount: max discount = forfeited amount per share.
• ⭐Companies Act 2013 prohibits issue at discount (except sweat equity).