The following are the different forms of capitaL
1. Authoriseui Capital. This is also known as Nominal or Registered capital. This is the capital with which the company is registered and this is the limit beyond which the company can not raise capital unless the capital clause of Memor,mdwn of Assoaation of the company is riot altered
The stamp to be affixed on the Memorandum before filing the sarwiththeRegistrar is calculated on tile basis ofthis capital. This is a nominal' capital and hence not a liability of the compare.
2. Issued Capital The capitai'vvhwch is issued by the company f subscription by the pubhc is known as issued capital. tfa company is rewash-- with 10,000 Equity Shares of Rs.'10 each and decides to issue 5,GO E
128 'S: SECRETARIAL PRACTICE
related money from the applicants For the purpose a meeting of the Board of Directors is convened and by a resolution the Board appoints the Banker(s) The Secretary along with this resolution submits the Following documents to the appointed banker(s) for open two accounts one is the name of the company itself and another in the name of Application Money on Equal Preference shares of the company (name of the cornpamy
1 Copy of the Memorandum of Association
2 Copy of the Arhcles of Assoaation
3 Copy of the incorporation Certificate
4 Copy of Resolution passed by the Board appointing the banker(s)
5 Specimen signature(s3 of those Who are authorized to operate the account of the company
6 The application form, duly i lied in, for opening the two amounts in question alongithinstruction if any
Usually three separate accoumts are opened for crediting the amoumt received on application allotment amd calls
2 Listing of Shares on Stock Exchange. Listing of shares etc. on Stock Exchange is done to facilitate the trading in the securities of the company Procedure of listing of securities has been dealt at length earner
3 AppomtmentofUnderritersffthecompanyisnotsureofgetting the necessary subscription it appoints underwriters through am Underwriting Agreement We have dealt at }ength the procedure etc. in Chapter 6
4 issue of prospectus
5 Filing of Prospectus
6 InvitationforSubscnption
7 Scmtiny of Applications Received
Applications received for subscription IS such by the banker(s) for scrutiny Usually irregular and incomplete applications are rejected outrigbt}v Regular and complete applications receive the attention of the Compaq y
8 Sorting of Applications. Applications received for allotment are usually sorted out in the following manner
(i) App}icafions are arranged according to the alphabets of the name of the applicants; or
(ii) Applications are arranged according to flee number of shares applied for This is done generally m ascending order This is done boo mse:
(a) the company may be interested in arranging the same for ma entry on a register according to the number of shares I applicants have applied for;
f,b) the company may know the total number of shares apparel f in a particular order, say in ascending order,
(c) the company may have fixed some minim share r allotment below which the applications receded mile 4 x easdy rejected; amdor
130 'S: SECRETARIAL PRACTICE
(vi) Make sure that the applications are arranged in z spa entered in the Share Applicztion and Allotment Lisr and carefully with the application forms and banker s list