What are Shares and the various terms attached to it? In the Balance sheet of an listed we would find Authorised Capital, Issued Shares, Subscribed shares and so on
Share Capital
Shares are the way a company raises long term capital for its business. Shares give a part of the company’s ownership to the shareholders. If it is owned by the promoters of the business, it is known as Treasury Shares. Rest of the shares can be owned by the public, retail investors or institutional investors.
Authorised Capital
It is the maximum number of shares available for the listed company to be issued for trading.
Issued Capital
The shares issued by the company to the Insiders of the company and to the public
Treasury Capital
The shares issued to the promoters and insiders of the company
Outstanding Shares
It is the shares available publicly to trade
Subscribed Shares
It is those issued shares which public and insiders subscribe to get or accept.
Called up Capital
The amount asked by the company to pay. It can be the full amount or instalments. Eg: If you own 100 shares of Rs.10. The total value becomes Rs.1000. The company calls up Rs.5 on per share i.e. you are supposed to pay Rs.5 per share totalling Rs.500/-
Calls in Arrear
When the called amount is not paid by the shareholder
Calls in Advance
When the shareholders pay more than the called amount
Paid up Capital
It is the amount paid by the shareholders on the shares and received by the company on the called up capital.
Forfeited Capital
If the shareholder doesn’t pay the call amount or loses it as he/she doesn’t follow the regulations of the company i.e. reselling or transferring the shares in a restricted period, etc. The company takes back or forfeits the shares and may re-issue it to others.
-D.V.P
FinancialDoodle 