ACCOUNTING FOR SHARES

 ISSUE OF SHARES- INTRODUCTION

Share issue is the process by which companies pass on
new shares to shareholders, who may themselves be
new or existing shareholders. Companies can issue
shares to both individuals and corporate bodies
 MEANING:

A share’s is a share in the share capital of a company.

The share capital will be split into large numbers of
units of same value. Each such unit is called share and
the value of each share is called face value.
Mainly there are two types of shares
Preference share
Equity shares
 Cumulative preference shares:
 Non-cumulative preference shares
 Participating preference shares
 Non-participating preference shares
 Convertible preference shares:
 Non-Convertible preference shares:
 Redeemable preference shares:
Three types of issue of shares
 Public issue

 Rights issue

 Preferential issue
 Eligibility norm 1: the company should meet
the following criteria (profitability route)
 Net tangible assets of at least ₹ 3 crores for 3
full years
 Distributable profits in at least 3 years
 Net worth of at least ₹ 1 crore in three years
 The issue size does not exceed 5 times the pre-
issue net worth.
 If change in the name , at least 50 % revenue for
preceding year should be from new activity.