Written on Mar, 25, 2012 by in | Leave a comment

As per Company Act In India, Promoter means:- a) A person or persons who have over-all control of the company.  b) Who make the plan for formation of company. c) Who make the programme to issue the securities to the public and those names are mentioned in prospectus as promoter(s). Promoters includes the following persons:- Promoter Group includes the promoter, …

Written on Mar, 24, 2012 by in | Leave a comment

In limited companies the capital is raised by issuing the shares. Capital is raised by the new companies as well as by existing companies by issue of shares in primary market. The shares are subscribed by public, mutual funds, foreign institutional investors and other financial institutions. The capital issues can be classified as below:- 1. PUBLIC ISSUES Public issue is …

Written on Mar, 24, 2012 by in | Leave a comment

A private limited company can start its business immediately after getting the certificate of incorporation from the Registrar of Companies A private limited company, which has converted into limited company, is not required to obtain any certificate for commencement of business from the Registrar of Companies before starting a business. Private company and a public company not having share capital, …

Written on Mar, 21, 2012 by in | Leave a comment

Company is legal and independent entity. In India, the following procedure is to be followed to form a company:- 1. Approval of Company’s Name:-  First of all the application should be sent to registrar of companies for approval of the company’s name. 2. Filing of Documents With Registrar of Companies:- After the name of company is approved by the registrar …

Written on Mar, 21, 2012 by in | Leave a comment

A company is an association of persons who contribute money or money’s worth to a common stock and use it for a common purpose.  It is a legal person created by law and governed by that particular law. Thus, a company is considered  as legal entity. A company is a business organization and is an association of individuals or other …

Written on Mar, 18, 2012 by in | 1 Comment.

Any interest payable or receivable at the time of preparation of balance sheet is known as accrued interest. For example when a business firm accepts any loan from outsiders, in that case it is the duty of the firm to pay the interest on loan to the lender as per the terms of the loan agreement. But it is always …

Written on Mar, 18, 2012 by in | 1 Comment.

When any amount is kept separate by a company out of its profit for future purpose then that is called as general reserves. In other words the general reserves are the retained earnings of a company which are kept aside out of company’s profits to meet future (known or unknown) obligations. General reserves are the part of Profit and Loss …

Written on Mar, 11, 2012 by in | Leave a comment

A sinking fund is fund which is created for a specific purpose.  The sinking fund is created for following purposes:- To redeem or repay long term liabilities.  For example:- debentures, long term loans etc. To replace a wasting assets. For example:- mines etc. To replace an assets of depreciable nature. For example fixed assets. REDEMPTION OF DEBENTURES OR OTHER LONG …

Written on Mar, 11, 2012 by in | Leave a comment

When the shares are issued at a price more than their face value or nominal value,  is said that the shares have been issued at a premium. The Company Act 1956 does not place any restriction on issue of shares at a premium but the amount received, as premium has to be placed in a separate account called Shares Premium …


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