Institute of Business Administration (JU)
BBA (17th Batch)
Session: 2007-08
Course: Legal Environment of Business
Course Code: BUS 211
CT: Rumana Islam
Lecture- 9 & 10
SHARE CAPITAL
The owner’s primary interest invested against shares in the company is what known as the Share capital of that Company. The Companies Act defines share as share in the capital of the Company and according to Section 6(b) of the Companies Act every subscriber of the memorandum must take at least one share. The summation is the product called share capital. In short the fund raised by the issue of shares is called the Share Capital.
It is entirely the business consideration that fixes the share capital of a company. But capital once raised must be maintained by the company and cannot be returned to the shareholders.
Classification of Share Capital:
1. Authorized Capital: The total limit of capital which a company can raise according to its memorandum is called authorized or registered capital.
‘X’ Company Ltd. starts business with one crore taka as registered capital which is divided into one lakh shares, each valuing 100 taka. Here taka one crore is the registered capital.
2. Issued Capital: The part of registered capital which is offered by the Company for subscription is called Issued Capital.
Among one lakh shares, eighty thousand shares are decided to be offered for subscription. So the issued capital will be (80,000×100) = 80, 00,000 taka.
3. Subscribed Capital: Subscribed capital is the value of shares which were subscribed and therefore allotted.
Among eighty thousand shares, for seventy thousand shares, applications are received from the public. So the Subscribed capital will be (70,000×100) = 70, 00,000 taka.
4. Called up Capital: Called up capital is the total amount collected from the shares issued which may be less than or equal to the subscribed capital.
From the seventy thousand shares, only...