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may allot the whole of the shares or debentures to an intermediary known as issuing house without offering the shares or debentues to the public.

#SHARE CAPITAL; A company limited by shares can issue shares. The share capital of the company can be classified under several heads. they are 1.Nominal capital or authorised capital or registered capital.2.Issued capital.3.subscribed capital.4.called up capital.5.paid up capital.6.uncalled capital.7.reserved capitalsec43 of the share capital of a company limited by shares shall be of two kinds,(a)equity share capital:it means all share capital of a company limited by shares othe than preference hare capital it may be with voting rights or with differential rights as dividend or voting. Rule 4 of the companies rules 2014 prescribe the conditions to be satisfied for issuing equity shares with differential right as to dividend or voting and are.(i) the articles of association of the company ashould authorise the issue of shares with differential rights.(ii)the issue od shares with differential rights should be authorise by an ordinary ressolution passed at a general meting of the shareholders.if the equity shares of a company are listed on a recognise stock exhange the issue of shares with differential rights shall be approved by the shareholders through postal ballot.(iii) the shares with differential rights shall nt exceed twenty sixpercent of the total post issue paid up equity share capital including equity shares with differential rights issued at any pointof time.(b)preference share capital it is thal part of the issued share capital of the company limited by shares which carries or would carry a preferential right with respect to (i)payment of dividend either as a fixed amount or an amount calculated at a fixed rate which may either be free or subject to income-taxand; (ii)repaymentin the case of winding up or repayment of capital.types preference shares 1.cumulative 2. Non cumulative 3. Participating 4. Non- participating 5. Covertable 6. Non convertable. Issue and redemption of preference share: a company havinga share capital may  if so authorised by its articles issue preference order to issue preference shares the following conditions should be satisfied (i) the issue of such shares is to authorised by passing a special resolution in the general meeting of the company. (ii)the company at the time of such issue of preference shares has noo subsisting default in the redumption of the preference shares issued earlier and in the payment of dividend due on any peference shares. The preference shares may be redeemed 1. At a fixed time or on the happening of a particular event any time at the companys option and 3. At any time at the shareholders option.

Alteration of share capital:the share capital of the company may be altered if the power  to alter the capital is given by articles by a special resolution the articles is to be altered first and incorporate a provision allowing alteration of capital. If there is provisions in the articles for alteration of capital the share capital of a company may be altered in several ways it may be 1. By increasing the authorised share capital 2. By consolidating any part of the share capital into shares of larger amount. coverting fully paid up shares into stock.

REDUCTION OF SHARE CAPITAL SEC66 A COMPANY LIMITED by shares can reduce its shares capital by a special resolution there should be provisions in the articles of association of the company allowing such reduction.the company may reduce its share capital in the following methods extinguishing or reducing the liabliity on any of its share in respect of share capital not paid up. 2. By writing off or cancelling any paid up capital which is lost or unrepresented by available assets 3. By paying off capita; which is in excess of the wants of the company.

#SWEAT EQUITY SHARES Sec 2(88) sweat equit shares issued by the company to its employee or directors at a discount or for consideration other than cash for providing know how or making available rights in the nature of intellectual property rights. It can be issued if only satisfying the following conditions: 1. The issue of sweat equity shares is to be authorised by a special resolution passed by the company in the general  meeting. 2.the resolution should specify the number of shares current market price consideration if any and the class or classes of directors or employee to whom such equity shares are to be issued 3. Not less than one year should have been elapsed since the company had commenced its business.

#BONUS SHARES: Sec63. s63(1) a company may issue fully paid up bonus shares to its members out of 1. Its free reserves 2. The security premium account 3. The capital redumption reserve account.   No issue of bonus shares shall be made by capitalising reserbes created by the revaluation of aasets.

#RULES TO BE FOLLOWED FOR THE ALLOTMENT OF SHARES:the allotment creates a binding contract between the applicant and company. Rules 1.minimum subscription 2. Application money 3.opening of the subscription list 4. Shares to be dealt in one or more stock exchanges 5.returns of allotments

#CERTIFICATES OF SHARES sec46. Every persons whos names is entered as a member in the register of members of the company has a right to recive a certifcate of his shares. The company shall issue certificate of shares within two months of the allotments of shares or within one month after the application for the registration of the transfer or trasmission of shares. It shall state- 1.the name and address of share holders. 2.numbers of shares held by him 3. Distinctive number of shares 4. Class of shares 5.amount paid on each share.

#DOCTRINE OF ESTOPPEL: there are two kinds of estoppel 1.estoppel as to title: if a company issues a share certificate in the name of a person it cannot afterwards be aleged that the person is not entitled to those shares. 2.estoppel as to payment: a company is estopped from alerging that the amount stated in the share certificate has been paid as not been paid.

#SECURITIES AT PREMIUM OR SHARE AT A PREMIUM:sec78. The momoradum or articles of association need not authorise such issue. The premium so recived must be transfered to a seprate amount called securities premium account. Purposes 1. For issuing fully paid bonus shares 2. To write off prelimanery expense. write off expenses, commission or discount on the issue of securities or debentures.

#SHARES AT A DISCOUNT. Sec53. If a company issues shares ata discount the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees and every officier who is in default shall be punished with punishable with imprisonment for a term of 6 months or fine not less than 1lakh rupees or may extend to 5 lakh rupees or with both.

#CALLS ON SHARES. A call is a demand made by a company to its shareholders to pay the whole or part of balance remaining unpaid on each share. It is to be made after passing a resolution of board of directors at a meeting of the board. The call must be made in accordance with provisions of article.

#FORFEITURE OF SHARE. When a person to whom shares are alloted fails to pay any calls on his shares, the company may procced to sue him for the payment or it may forfeit its shares. Conditions 1.a forfeiture for non payment must be authorised by the articles of the company 2.the notice must give not less than 14days time, it must state the possibility of forfeiture for the failure to pay within the period. 3. The directors must pass a resolution forfeiting the shares.if resolution is not passed the forfeiture will be invalid.

Effects: 1.a persons whos shares have been forfeited ceased to be a member in respect of forfieted share 2. The liability of the members whos shares have been forfeited ceases and when the company recives payment in full in respect of the shares.

#TRASFER AND TRANSMISSION OF SHARES. Its a statuetory right and cannot be taken away by any provisions of the articles of order to register a transfer of share an instrument of transfer stamped and executed by the transferer and transferee together with share certificate should be submitted to the company it should specify the name addres and occupation of the transferee. The company has to issue new share certificate in the name of transferee within one month. Mathrubumi printing vs vardham publishing ltd 1992.

Trasmissions of shares. When the ownership of shares change one to another by operation of law.death of a registered member shall nessicitate change in ownership. The legal representative of deceased shareholders are entitled to get it registered in their name. Instrument of transfer is not required. The new share certificate in the name of legal representative should certify within one month.

#PRE-EMPTIVE RATE OF SHAREHOLDERS OR RIGHTS ISSUE. Sec62. If a company proposes to increase the subscribed capital by allotment of further shares, such shares shall be offered to the existing equity shareholders in the ratio of shares held by them. The preferential rate of shareholders is know as rights issue. The notice shall give a minimum 15 and 30 days to accept the offer. If the offer is not accepted within the time the share may be sold to public.

#DEBENTURES. Sec71. It is instrument issued by the company evidencing a debt. It includes debenture stocks and bonds of a company. A debenture is a document which either creates a debt or acknowledges a debt. Charactertists; is a document as evidence of debt. 2. It is issued under the companies seal. usually specifies the date of repayment. 4. Specifies the the rate of interest. 5. Debenture does not have any right to vote.

Fixed charge and floating charge: fixed charge:when a charge is created on some assertined and fixed assets of the company it is fixed charge. If the fixed charge is created on assets the company is prevented with dealing with that property without the concent of charge holder. Floating charge: is created on some assets which is constently changing. Eg: raw materials  or book debts.

#MEETING OF SHARE HOLDERS: kinds: 1. Annual general meeting 2. Ordinary business and special business 3. Exterordinary general meeting.

#ESSENTIALS OF VALID MEETING: 1.proper authority should call the meeting. 2. Notice of meeting should be given to persons entitled 3. There should be quorum for meeting 4. Chairman of the meeting 5. Minutes of the meeting 6. Voting and call.

#PROXYS: The word proxy is used in two senses. The instrument by which a person is appointed to vote for the shareholders in a general meeting is called proxy sec105. The instrument of proxy shall be in writing and signed by the shareholder. It must be deposited with the company 48 hours before the meeting.