SHARES

Issue of shares is the main source of

long term finance.
It is a unit of capital of the company.
Each share is of a definite face value.
The face value of a share indicates
the interest of a person in the
company and the extent of his
liability.
 Types of shares.
Preference shares
Equity Shares
 Preference Shares
The companies act,1956 defines preference
shares as one which fulfills the following two
requirements :
1)A preferential right in respect of a fixed
dividend, it may consist of a fixed amount or a
fixed rate.
2)A preferential right as to repayment of capital
in case of winding up of the company in priority
to other classes of shares.
 FEATURES OF PREFERENCE
SHARES
Conversion
Participation in income
Claim on assets
Controlling power
Redemption
 Equity shares
Equity shares are shares
which do not enjoy any
preferential right in the matter
of payment of dividend or
repayment of capital.
It is raised to meet the needs
of permanent capital.
 Features of Equity shares
Maturity
Claim on income
Claim on assets
Control
Pre-emptive rights