Why does the company issue shares?

Stocks vs. Shares: What's the Difference? - TheStreet

Hi guy’s

This is Ravi Varma, in this article I will tell you about shares.

Let’s start,

What is Share?

Shares in any company are covered in a limited amount which is called Authorized Capital and this capital is issued in small parts which we call shares.

note point****No company can issue more than 200000 shares.

  • What do you understand By share?

We can understand this in simple words in such a way that when any company has to enlarge its firm, then at that time it needs capital, with the help of which any businessman can increase his company size. So at that time, the company issues its authorized capital in the stock market to enlarge its firm, which all the people buy and become the owners of the company. And the company needs the winning capital, it gets it

  • Types of shares?

There are two types of shares

Types of Shares: Meaning of Shares, Equity Share, Preferential Share

(A) equity share.

(B) preference share.

  • Equity share:- Generally, all the companies issue equity shares, with the help of which all the companies increase the size of their business and whatever shareholder buys the equity shares, they become the right of ownership of that company.
  • preference share:- Any company generally issues this share to any financial institution because the preference share that the shareholder buys does not mean the profit and loss of the company, it means his profit every month even if the company is at loss.

What do you understand by issued capital?

We can say this in such a way that when any company needs capital, it issues its authorized capital in the share market, which we call issued capital.

What do you understanding about subscribe capital?

The capital we issue in the market and the people who bought this share paid it in full, then, in this case, it is known that how many shareholders in the market have subscribed to the share after paying the full share what we call subscribe capital.

What do you understanding about paid-up share capital?

When we issue the shares of our company in the share market, then whatever shareholder buys the share after paying it in full, then it is called paid-up share capital.

What do you understand by subscribed & fully paid-up share capital?

When any shareholder buys the shares issued by you and makes full payment without any problem, then we call it fully paid-up share capital.

What do you understand by subscribed but not fully paid-up share capital?

When a shareholder buys the shares issued by you and suddenly due to some problem he is unable to pay the shares in full, then we call it subscribed but not fully paid-up share capital.

  • Any company can issue its shares in two ways.

Any company can issue its shares in two ways.

  1. At par
  2. At premium

At par:- When a company starts a new business, it issues its shares in the share market at a limited rate which we called share Atpar.

At premium:- If there is a company whose reputation in the market remains very good and its goodwill is also very good, then when such a company issues its shares, then it issues its shares at a rate higher than the normal rate which we called share Atpremium.

Facebook Notice for EU! You need to login to view and post FB Comments!