This lecture discusses various entries which are peculiar to companies.

Share Capital

• Total capital of the company is divided into a number of small indivisible units of a fixed amount and each such unit is called a share.
• As the total capital of the company is divided into shares, the capital of the company is called ‘share capital’.
• The fixed value of a share, printed on the share certificate is called nominal/ par/ face value of a share.
• A company can issue shares at a price different from the face value of a share; this is issue price of share.
• Types of shares
  Shares issued by a company are divided into two categories:

• Preference Shares:
  The shares which are assured of preferential dividend at a fixed rate during the life of company and carry a preferential right over other shareholders to be paid first in case of winding up of company.

• Equity Shares:
  Equity shares are those shares, which are not preference shares. It means that they do not enjoy any preferential rights in the matter of payment of dividend or repayment of capital.