Shares “ A share is the interest of a shareholder in the company, measured by a sum of money, for the purpose of liability in the first place, and of interest in the second, but also consisting of a series of mutual covenants entered into by all shareholders inter se in accordance with the companies Act.”

Stock and shares Shares may be partly paid Stocks are fully paid Shares can be issued directly stocks can not be issued directly Shares have a nominal value stock has no nominal value Shares must bear distinctive numbers stock is never numbered Shares are of equal denomination while stocks may be split differently Shares can not be transferred in fractions stocks can be transfeArred in fractions

Types of shares Equity shares Preference shares -cumulative and non cumulative -Participating and non participating -Convertible and non convertible -Redeemable Preference shares

Difference between preference and equity shares Nomination of shares(section72) Issue of shares -Proper authority -Absolute and unconditional -Must be communicated -Revocation of the offer Private placement Irregular allotment

Liability of directors When they contravene the provisions as to allotment they are liable to compensate the company.

Call on Shares According to the provisions of the act Amount, place and time of payment Notice of call Bona fide and for the benefit of the company Uniform basis Time within which shares are to be made fully paid up SEBI guidelines

Share certificate Section 46 Delivery of shares certificates -With in two months from the date of incorporation -Within 2 months from the date of allotment -Within 1 month from the date of receipt of instrument of transfer or intimation of transmission -within 6 months from the date of allotment in case of debentures

Share Warrants Conditions for issue -Shares must be fully paid -Article must authorise it -Central government approval is required -must be issued under the seal of the company -Application to RBI

Distinction between share warrant and share certificate Lien on shares Surrender of shares Forfeiture of shares Reissue of forfeited shares Buy back of shares Issue of share at premium Issue of sweat equity shares Dematerialisation of shares Application supported by block investments Issue of bonus shares Employee stock option scheme