Share In Company

Share is right to participate in the profits made

by the while it is going concern, and in the
assets of the company when it is wound up
 Meaning of Share
• A share in a company is one of the units into
which the total capital of the company is
divided.

Share means a share in the capital of the

company
 Share Movable Property
• A share is undoubtedly is a movable property .

It is incorporeal in nature and it consists

merely of bundle of rights and obligation.

 Kinds of Share
• Kinds of Shares

• Ordinary or equity shares

• Preference share
• Deferred shares
 Difference between Preference And
Equity share
Preference Share Equity Share
Fix rate of dividend Rate of Dividend is not fixed

Preference share are entitled to Equity share are entitled to

receive dividend in preference to receive dividend only after the
equity shares payment of dividend to
preference shares

Preference Share have preference Equity share have no such

to equity shares with regard to preference in the event winding
payment of capital in the event of up , these share get their capital
winding up back only after the payment of
capital to preference shares
 Continued…
Redeemable preference shares Equity shares cannot be
may be redeemed. redeemed by the company except
under a scheme involving
reduction of capital.
Right share or bonus share are not Right share or bonus shares may
issued to the existing preference be issued by the company to
share holders existing equity shareholder

Comulative preference shares are Equity share are not entitled to any
entitled to receive arrears of dividend arrears of dividends as no dividend is
when there are sufficient profits paid in case of no profits .
 Ordinary shares
• A share entitling its holder to dividends which
vary in amount and may even be missed,
depending on the fortunes of the company.

Ordinary share have no special rights as to

dividend or capital allocated to them.
 Preference Share
• A share which entitles the holder to a fixed
dividend, whose payment takes priority over
that of ordinary share dividends.
 Kinds of Preference shares
• Cumulative and non cumulative preference
shares
• Participating and non participating
• Convertible and non-convertible preference
shares
• Redeemable preference shares
 Public issue of Shares
• Issue of Prospectus
• Receipt of Applications
• Closing of subscription lists
• Allotment of shares
• Letters of allotment
• Return of Allotment
 Issue of shares
• Issue of stock on a public market rather than
being privately funded by the companies own
promoter(s), which may not be enough capital
for the business to start up, produce, or
continue running. By issuing stock publically,
this allows the public to own a part of the
company, though not be a controlling factor.
 Intermediaries to an issue of public
share
• Merchant banker

• Registrar to the issue

• Bankers to the issue

 Determination of price
• Consultation
• Specified securities
• Cut off price
• Individual investor
• Rejection
 Allotment
• Allotment is an appropriation of a certain
number of shares. It is an appropriation, and
of the previously un-appropriated capital of a
company , of a certain number of shares to a
person
 Essential of Valid Allotment
• Legal rules under contract act

• Legal rules under companies ordinance

 Restriction on allotment
• When shares are issued by a private company

• When public company does not make public

offer
Irregular Allotment Circumstances
• Where minimum subscription has not been
received.
• Where a copy of prospectus has not been filed
with the registrar
• Where full amount of shares applied has not
been received with the application
• Where stock exchange has refused premission
 Continued…
• Where a copy of statement in lieu of
prospectus has not been delivered to registrar
• Where application money has not been kept
in seprate account with a scheduled bank