What is Marked and unmarked applications

The applications received by the company bearing the official stamp of the individual
underwriter or the respective underwriters are called marked applications.

Applications received by the company directly from the public which do not bear the official
stamp of the underwriters are called unmarked applications.

Sole Underwriters:

When the issue is underwritten by only one underwriter, such underwriting is

termed as ‘Sole Underwriting’.

Types of underwriting with definition

Firm Underwriting - is an arrangement under which an underwriter or
underwriters make definite commitment to take up certain shares or
debentures of a company, irrespective of the number of shares or debentures
subscribed by the public.

Pure underwriting – a pure underwriting is an arrangement under which an

underwriter or underwriters agree to take up the shares or debentures of a
company only when the shares or debentures underwritten by them is not fully
subscribed by the public.

Partial Underwriting – is one under which a part of the issue of shares or

debentures of a company is underwritten by one or more underwriters.

Complete underwriting –is one under which the whole of the issue of shares
or debentures of a company is underwritten by one or more underwriters.

Underwriting commission:
The underwriters are entitled to some consideration, for the risk they
undertake in underwriting the shares or debentures of a public company. The
consideration payable to the underwriters by a public company for
underwriting the shares or debentures is called underwriting commission.
Maximum limit of underwriting commission
Chapter -2

Types of Preference Shares:

 Redeemable Preference Shares: A company may issue this type of
shares on the condition that the company will repay the amount of share
capital to the holders of this category of shares after the fixed period.
 Irredeemable Preference Shares: The preference shares, which do not
carry the agreement of redemption are known as irredeemable preference
shares.
 Convertible Preference Shares: The shares enjoy the right to the holder
to get them converted into equity shares according to the terms and
conditions of the issue.
 Non-convertible Preference Shares: The holders of these shares do not
enjoy the right to get the shares converted into equity shares. Unless
otherwise stated, Preference shares are non-convertible
 Non-participating Preference Shares: These shares carry only a fixed
rate of dividend without any right to get additional dividend. Unless
otherwise stated, the preference shares are non-participating.

Why is CRR created?

When shares are redeemed, company have to replenish the capital by
issue of fresh share or to create a capital reserve equivalent to the
amount of share capital redeemed.
Capital redemption reserve can be created out of dividend equalization
fund, profit & loss account and general reserve account.
CRR = Nominal value of shares redeemed – Nominal value of shares
issued).

Divisible profits
Divisible profit means profit or that part of profit that can be used for
declaring dividends. General reserve and dividend equalisation reserve is
an example of divisible profits

What is forfeiture of share- when the allotted shares are cancelled by

the issuing company due to non-payment of the subscription amount as
requested by the issuing company from the shareholder.
 Reissue of shares - If shares are forfeited the membership of the shareholder stands
cancelled and the shares become the property of the company. Thereafter, the
company has an option of selling such forfeited shares. The sale of forfeited shares is
called 'reissue of shares'

Chapter 4
Liquidation or winding up is a legal term and refers to the procedure
through which the affairs of a company are wound up by law.
An administrator, who is called liquidator, is appoint to take control
of company, collect its assents, pay its debts and finally if any
surplus assents are left, they are divided among the members of the
company in proportion to their rights under the articles.

PROCESS OF WINDING UP:

1. Selling of the assets of the company
2. Paying off the liabilities of the company
3. If there is any deficiency to pay to the creditors and the shareholders
are called upon to pay unpaid amount on their articles.
4. In case of surplus, after paying off the liabilities, it may be distributed
to the contributories according to their rights under the articles.
5. At the end, the Registrar of Companies removes the name of the
company from the Register of Companies which is maintained by his
office.
MODES OF WINDING UP:
There are three modes of winding up of the company:
1. Compulsory winding up by the court
2. Voluntary winding up by members or creditors
3. Winding up under the supervision of the court.

Winding up of a Company by Tribunal

As per section 271 of the Companies Act 2013, a company can be wound
up by a tribunal in the following circumstances:
2. If the company has by special resolution resolved that the
company be wound up by the tribunal.
3. If the company has acted against the interest of the integrity or
morality of India, security of the state, or has spoiled any kind of friendly
relations with foreign or neighbouring countries.
4. If the company has not filed its financial statements or annual
returns for preceding five consecutive financial years.
5. If the tribunal by any means finds that it is just and equitable that
the company should be wound up.
6. If the company in any way is indulged in fraudulent.