The Type of Shareholders Who Can Participate in the Management of the Company. - Secretarial Practice

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One Word Answer

The type of shareholders who can participate in the management of the company.

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Solution

Equity or Ordinary Shareholders.

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2014-2015 (March)

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RELATED QUESTIONS

Equity Shares and Preference Shares.


Pass necessary journal entries in the following cases

Kay Ltd. converted 3,000, 12% debentures of Rs 100 each issued at a premium of 10% into equity shares of Rs 100 each issued at a premium of 25%.


Pass necessary journal entries in the following cases

Jay Ltd. redeemed 1,500, 12% debentures of Rs 1,000 each issued at a discount of 10% by converting them into equity shares of Rs 50 each issued at par.


Jain Ltd. purchased Building for Rs 10,00,000 from Gupta Ltd. 10% of the payable amount was paid by a cheque drawn in favour of Gupta Ltd. The balance was paid by issue of Equity Shares of Rs 10 each at a discount of 10%.

Pass necessary Journal Entries in the books of Jain Ltd. 


From the following information, calculate any two of the following ratios:

(a) Debt-Equity Ratio

(b) Working Capital Turnover Ratio and

(c) Return on Investment

 

Information: Equity Share capital Rs 10,00,000, General Reserve Rs 1,00,000; Profit and Loss Account after tax and interest Rs 3,00,000; 12% Debenture Rs 4,00,000; Creditors Rs 3,00,000; Land and Building Rs 13,00,000; Furniture Rs 3,00,000; Debtors Rs 2,00,00 and Cash Rs 1,10,000 and Preliminary expenses Rs 1,00,000

 

Sales for the year ended 31-3-2011 was Rs 30,00,000. Tax Paid 50%.


 The bonds on which rate of interest remains constant throughout the life of the bond.


A person who purchases shares of a company is known as _______ of the company. 


Shares which are redeemed after a certain period of time. 


State, with reason, whether the following statement is True or False.

Preference shareholders do not enjoy normal voting rights.


State, with reasons, whether the following statement is True or False :

Right shares are issued to the general public. 


Attempt the following : 

Write a letter to the debenture holder informing him/her about the conversion of debentures into equity shares.


Write features of shares. 


Write a word or terrn or phrase which can substitute each of
the following statements:

The value of share which is determined by demand and supply forces in the share market.  


Write a word or term or phrase which can substitute each of the following statements: 

Type of preference shares which can be redeemed after a certain period of time. 


Equity shares are paid dividend at ____________ rate.


Name the shareholders who are real masters of the company.


A company must issue __________ shares.  


Fully convertible debentures are converted into __________ shares on maturity.  


Long Answer Question

What is a ‘Preference Share’? Describe the different types of preference shares.


The Adersh Control Device Ltd was registered with the authorised capital of Rs 3,00,000 divided into 30,000 shares of Rs 10 each, which were offered to the public. Amount payable as Rs 3 per share on application, Rs 4 per share on allotment and Rs 3 per share on first and final call. These share were fully subscribed and all money was dully received. Prepare journal and Cash Book.


Software solution India Ltd inviting application for 20,000 equity share of Rs 100 each, payable Rs 40 on application, Rs 30 on allotment and Rs 30 on call. The company received applications for 32,000 shares. Application for 2,000 shares were rejected and money returned to Applicants. Applications for 10,000 shares were accepted in full and applicants for 20,000 share allotted half of the number of share applied and excess application money adjusted into allotment. All money received due on allotment and call. Prepare journal and cash book.


Sangam Ltd. invited applications for 10,000 Equity Shares of ₹ 100 each issued at par. The amount was payable on application. The issue was oversubscribed by 2,000 shares and allotment was made on pro rata basis. Pass necessary Journal entries. 


Bharat Ltd made the first call of ₹ 2 per share on its 1,00,000 Equity Shares on 1st March , 2006. Ashok, a shareholder, holding 800 shares paid the second and final call amount along with the first call money. The second and final call amount was ₹ 3 per share. Pass necessary journal entries for recording  the above using the Calls-in Advance Account.


2,000 Equity Shares of ₹ 10 each  were issued to  Limited  from whom assets of ₹ 25,000 were acquired .
Pass Journal entry.


Rajan Ltd . purchased assets from Geeta & Co . for ₹ 5,00,000. A sum of ₹ 1,00,000 was paid by means of a bank draft and for the balance due Rajan Ltd. issued equity Shares of ₹ 10 each at a premium of 25%. journalise the above transactions in the books of the company.


Goodluck Ltd purchased  machinery costing ₹ 10,00,000 from Fair Deals Ltd. The company paid the price by issue of Equity Shares of ₹ 10 each at a premium of 25%.
Pass necessary Journal entries for the above transactions in the books of Goodluck Ltd.


Jain Ltd  purchased machinery costing ₹ 10,00,000 from Ayer Ltd. 50% of the payment was made by cheque and for the remaining 50% , the company issued Equity Shares of ₹ 100 each at a premium of 25% . Pass necessary Journal entries  in the books of Jain Ltd . for the above transaction.


Sona Ltd.  purchased machinery costing ₹ 17,00,000 from Mona Ltd. Sona Ltd. paid 20% of the amount by cheque and for the balance amount issued Equity Shares of ₹ 100 each at a premium of 25% . Pass necessary Journal entries for the above transactions in the books of Sona Ltd .Show your working notes clearly.


Light Lamps Ltd. issued 50,000 shares of ₹ 10 each as fully paid-up to the promoters for their services to set-up the company . It also issued 2,000 shares of ₹ 10 each  credited as fully paid-up to the underwriters of shares for their services . journalise these transactions.


Sandesh Ltd. took over the assets of ₹ 7,00,000 and liabilities of   ₹ 2,00,000 from Sanchar Ltd. for a purchase consideration of  ₹ 4,59,500.  ₹ 8,500 were paid by accepting a draft in favour of Sanchar Ltd. payable after three months and the balance was paid by issue of equity shares of  ₹ 10 each at a premium of 10% in favour of Sanchar Ltd.
Pass necessary journal entries for the above transactions in the books of Sandesh Ltd.


Ankit Ltd. issued 20,000 equity shares of 10 each at a premium of ₹ 2 per share, payable as:

On Application : ₹ 3
On Allotment : ₹ 5 (including premium)
On First Call : ₹ 2
On Second and Final Call : ₹ 2

Vijay was allotted 500 shares. Pass the necessary Journal entries relating to the forfeiture of shares in following cases.

Case I Vijay did not pay allotment money and his shares were immediately forfeited.
Case II Vijay did not pay allotment and first call, his shares were forfeited after first call.
Case III Vijay failed to pay first call and his shares were forfeited immediately.
Case IV Vijay failed to pay both the calls and his shares were forfeited.

State, with reasons, whether the following statement is True or False

Handling demat shares is very time consuming.


State, with reason, whether the following statement is True or False.

Preference shareholders have normal voting rights.


Explain the features of preference shares.


Answer the question.
Explain the advantages of equity shares, as a source of finance. 


Explain any three disadvantages of issuing equity shares, from the Company's point of view. 


Distinguish between equity shares and preference shares.


What is meant by participating preference shares?


Write any four features of equity shares.


According to Companies Act company cannot issue its share at ________.


Which type of shares cannot be issued as per the Companies Act, 2013?


Which type of shares is not convertible?


The director of a company must be ______.


Equity share holders are ______.


As per the Companies Act, 2013, companies cannot issue ______.


From the following Balance Sheets of Vinayak Ltd. as of 31st March 2021, Prepare a Common-size Balance Sheet.

Vinayak Ltd. Balance Sheet as of 31st March, 2021
Particulars Note no. 31.3.2021 (₹) 31.3.2020 (₹)
I EQUITY AND LIABILITIES      
1. Shareholder’s Funds:      
a. Share Capital   30,50,000 20,00,000
b. Reserve and Surplus   2,80,000 6,00,000
2. Current Liabilities:      
a. Trade Payable   6,70,000 4,00,000
Total   40,00,000 30,00,000
II ASSETS      
1. Non-Current Assets:      
a. Fixed Assets:      
i. Tangible Assets   16,00,000 12,00,000
ii. Intangible Assets   2,00,000 3,00,000
2. Current Assets      
a. Inventories   8,00,000 3,00,000
b. Trade Receivables   12,00,000 10,00,000
c. Cash and Cash Equivalents   2,00,000 2,00,000
Total   40,00,000 30,00,000

On the basis of information given by Aradhana Ltd., prepare a Cash Flow Statement for the year ending 31st March 2021:

Aradhana Ltd. Balance Sheet as on 31st March, 2021
Particulars Note No. 31st March, 2020 31st March, 2021
I. Equity and Liabilities      
1. Shareholder’s Funds      
(a) Share Capital   5,00,000 7,30,000
(b) Reserves and Surplus 1 3,50,000 3,70,000
2. Non-current Liabilities      
Long-term Borrowings 2 4,00,000 2,00,000
3. Current Liabilities      
(a) Trade Payables 3 3,60,000 4,60,000
(b) Short Term provisions 4 3,25,000 3,20,000
Total   19,35,000 20,80,000
II. Assets      
1. Non-current Assets      
(a)Fixed Assets 5    
(i) Tangible Assets 6 4,50,000 5,00,000
(ii) Intangible Assets   3,10,000 3,02,000
(b)Long-term Loans and Advances   4,00,000 4,30,000
2. Current Assets      
(a) Inventories   2,70,000 2,90,000
(b) Trade Receivables   2,40,000 2,60,000
(c) Cash and Cash Equivalents   2,65,000 2,98,000
Total   19,35,000  20,80,000

Note to Accounts

Particulars 31st March 2020 31st March 2021
1. Reserves and Surplus Statement of Profit and loss 3,50,000 3,70,000
2. Long-term Borrowings 10% Debentures 4,00,000 2,00,000
3. Trade Payables    
Creditors 2,40,000 2,60,000
Bills Payable 1,20,000 2,00,000
  3,60,000 4,60,000
4. Short-Term Provisions Provision for Tax 3,25,000 3,20,000
5. Tangible Fixed Assets     
Machinery 5,50,000 6,60,000
Less: Provision for Depreciation 1,00,000 1,60,000
  4,50,000 5,00,000
6. Intangible Fixed Assets Patents 3,10,000 3,02,000

Additional Information:

  1. Debentures were redeemed on 1st April,2020.
  2. Tax paid during the year ₹2,80,000.

When Equity Shares dominate the capital structure, the capital is considered as high geared.


What are preference shares?


Give any four types of Preferences shares.


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