Hi,
      These are the new project guidelines for business studies:

Project related guidelines for the students in Business Studies (2015-2016)

Students are required to select any one topic out of four units given below for the project.

I. Project One: Elements of Business Environment:

Changes witnessed over the last few years on mode of packaging and its economic impact. Identify the following changes:

a) The changes in transportation of fruits and vegetables such as cardboard crates being used in place of wooden crates, etc. Reasons for above changes.

 b) Milk being supplied in glass bottles, later in plastic bags and now in tetra pack and through vending machines.

c) Plastic furniture [doors and stools] gaining preference over wooden furniture.

d) The origin of cardboard and the various stages of changes and growth.

 e) Brown paper bags packing to recycled paper bags to plastic bags and cloth bags.

f) Re use of packaging [bottles, jars and tins] to attract customers for their products.

g) The concept of pyramid packaging for milk.

 h) Cost being borne by the consumer/manufacturer.

i) Packaging used as means of advertisements.

 2. The reasons behind changes in the following: Coca – Cola and Fanta in the seventies to Thums up and Campa Cola in the eighties to Pepsi and Coke in nineties. The teacher may guide the students to the times when India sold Coca Cola and Fanta which were being manufactured in India by the foreign companies. The students may be asked to enquirer about a) Reasons of stopping the manufacturing of the above mentioned drinks in India THEN.

b) The introduction of Thums up and Campa cola range.

c) Re entry of Coke and introduction of Pepsi in the Indian market.

d) Factors responsible for the change.

e) Other linkages with the above.

f) Leading brands and the company having the highest market share. g) Different local brands venturing in the Indian market.

h) The rating of the above brands in the market.

i) The survival and reasons of failure in competition with the international brands.

 j) Other observations made by the students The teacher may develop the following on the above lines  3. Changing role of the women in the past 25 years relating to joint families, nuclear families, women as a bread earner of the family, changes in the requirement trend of mixers, washing machines, micro wave and standard of living.

4. The changes in the pattern of import and export of different Products.

5. The trend in the changing interest rates and their effect on savings.

6. A study on child labor laws, its implementation and consequences.

 7. The state of „anti plastic campaign,‟ the law, its effects and implementation. 8. The laws of mining /setting up of industries, rules and regulations, licences required for running that business.

9. Social factors affecting acceptance and rejection of an identified product. (Dish washer, Atta maker, etc)

10. What has the effect of change in environment on the types of goods and services? The students can take examples like: a) Washing machines, micro waves, mixers and grinder.

b) Need for crèche, day care centre for young and old. c) Ready to eat food, eating food outside, and tiffin centres.

11. Change in the man-machine ratio with technological advances resulting in change of cost structure. 12. Effect of changes in technological environment on the behavior of employee.

II. Project Two: Principles of Management  : Students are required to observe the application of the general Principles of management advocated by Fayol. Fayol‟s principles

1.       Division of work. 2. Unity of command. 3. Unity of direction. 4. Scalar chain 5. Espirit de corps 6. Fair remuneration to all. 7. Order. 8. Equity. 9. Discipline 10. Subordination of individual interest to general interest. 11. Initiative. 12. Centralization and decentralization. 13. Stability of tenure.

2.       OR They may inquire into the application of scientific management techniques by F.W. Taylor . Scientific techniques of management.           

1.       Functional foreman ship. 2. Standardization and simplification of work. 3. Method study. 4. Motion Study. 5. Time Study. 6. Fatigue Study 7. Differential piece rate plan.

Following instructions and accountability of subordinates to higher authorities.l  Visibility of order and equity in the unit.l  Balance of authority and responsibility.l  Communication levels and pattern in the organisation.l  Methods and techniques followed by the organisation for unity of direction and coordination  amongst all.  Methods of wage payments followed.

The arrangements of fatigue study.l

 Derivation of time study.l  Derivation and advantages of method study.l  Organisational chart of functional foreman-ship l  Any other identified in the organizational. 

vi. It is advised that students should be motivated to pick up different areas of visit. As presentations of different areas in the class would help in better understanding to the other students.

vii. The students may be encouraged to develop worksheets. Teachers should help students to prepare observation tools to be used for undertaking the project. Examples; worksheets, questionnaire, interviews and organisational chart etc.

 III. Project Three: Stock Exchange :The purpose of this project is to teach school students the values of investing and utilizing the stock market. This project also teaches important lessons about the economy, mathematics and financial responsibility. The basis of this project is to learn about the stock market while investing a specified amount of fake money in certain stocks. Students then study the results and buy and sell as they see fit.

This project will also guide the students and provide them with the supplies necessary to successfully monitor stock market trends and will teach students how to calculate profit and loss on stock. The project work will enable the students to:  understand the topics like sources of business finance and capital market  understand the concepts used in stock exchange   inculcate the habit of watching business channels, reading business journals/newspapers and  seeking information from their elders. The students are expected to:

a) Develop a brief report on History of Stock Exchanges in India. (your country) b) Prepare a list of at least 25 companies listed on a Stock Exchange.

 c) To make an imaginary portfolio totaling a sum of Rs. 50,000 equally in any of the 5 companies of their choice listed above over a period of twenty working days. The students may be required to report the prices of the stocks on daily basis and present it diagrammatically on the graph paper.  They will understand the weekly holidays and the holidays under the Negotiable Instruments Act.l They will also come across with terms like closing prices, opening prices, etc.  During this period of recording students are supposed to distinctively record the daily and starting  and closing prices of the week other days under the negotiable instrument act so that they acquire knowledge about closing and opening prices. 

The students may conclude by identifying the causes in the fluctuations of prices. Normally it would  be related to the front page news of the a business journal, for example, Change of seasons.l  Festivals.l  Spread of epidemic.l  Strikes and accidents   Natural and human disasters.l  Political environment.l  Lack of faith in the government policies.l  Impact of changes in government policies for specific industry.l  International events.l  Contract and treaties at the international scene.l  Relations with the neighboring countries.l  Crisis in developed countries, etc.l

The students are expected to find the value of their investments and accordingly rearrange their portfolio. The project work should cover the following aspects; 1. Graphical presentation of the share prices of different companies on different dates.

2. Change in market value of shares due to change of seasons, festivals, natural and human disasters.

3. Change in market value of shares due to change in political environment/ policies of various countries/crisis in developed countries or any other reasons

 4. Identify the top ten companies out of the 25 selected on the basis of their market value of shares. It does not matter if they have made profits or losses.

 IV. Project Four: Marketing :1. Toothpaste 2. Noodles 3. Shampoo 4. Bathing soap 5. Washing detergent 6. Washing powder 7. Lipstick 8. Moisturiser 9. Shoe polish 10. Pen 11. Shoes 12. Hair dye 13. Mobile 14. Chocolate 15. Sauces/ketchup 16. Ready soups 17. Body spray 18. Fairness cream 19. Hair oil 20. Roasted Snacks 21. Jeans 22. Pickles 23. Squashes 24. Jams 25. Salt 26. Bread 27. Butter 28. Shaving cream 29. Razor 30. Cheese spreads 31. e –Wash 32. Tiffin wallah 33. Air Conditioners 34. Infant dress 35. Sunglasses 36. Fans 37. Fruit candy 37. Washing powder 39. Bathroom cleaner 40. Wipes 41. Shoe polish 42. Blanket 43. Baby Diapers 44. Hair dye 45. Adhesives 46. Refrigerator 47. Ladies footwear 48. Ready soups 49. RO system 50. Fairness cream 51. Mixers 52. Roasted Snacks 53. Learning Toys 54. Pickles 55. Squashes 56. Jams 277 57. Salt 58. Bread 59. Butter 60. Shaving cream 61. Razor 62. Cheese spreads 63. Microwave oven 64. Music player 65. Pencil 66. Eraser 67. Water bottle 68. Wallet 69. Furniture 70. Crayons 71. Newspaper 72. Jewelry 73. Nail polish 74. Water storage tank 75. Pen drive 76. Ladies bag 77. DTH 78. Sarees 79. Car 80. Cycle 81. Kurti 82. Bike 83. Cosmetology product 84. Crockery 85. Cutlery 86. Camera 87. Breakfast cereal 88. Invertor 89. Suitcase/airbag 90. Washing machine 91. Coffee 92. Tea Any more as suggested by the teacher.

Now the students are required to make a project on the identified product/service keeping in mind the following.

1. Why have they selected this product/service?

2. Find out „5‟ competitive brands that exist in the market.

3. What permission and licences would be required to make the product?

4. What are your competitors Unique Selling Proposition.[U.S.P.]?

5. Does your product have any range give details?

 6. What is the name of your product?

7. Enlist its features.

 8. Draw the „Label‟ of your product.

9. Draw a logo for your product.

10. Draft a tag line.

11. What is the selling price of your competitor‟s product? (i) Selling price to consumer  (ii) Selling price to retailer (iii) Selling price to wholesaler What is the profit margin in percentage to the  Manufacturer.l  Wholesaler.l  Retailer.l

 12. How will your product be packaged?

13. Which channel of distribution are you going to use? Give reasons for selection?

14. Decisions related to warehousing, state reasons.

15. What is going to be your selling price? (i) To consumer (ii) To retailer (iii) To wholesaler

16. List 5 ways of promoting your product.

17. Any schemes for (i) The wholesaler (ii) The retailer (iii) The consumer

18. What is going to be your „U.S.P? 1

9. What means of transport you will use and why?

20. Draft a social message for your label.

21. What cost effective techniques will you follow for your product.

22. What cost effective techniques will you follow for your promotion plan. At this stage the students will realize the importance of the concept of marketing mix and the necessary decision regarding the four P‟s of marketing.  Product   Place  Price   Promotion 

 On the basis of the work done by the students the project report should include the following:

1. Type of product /service identified and the (consumer/industries) process involve there in.

2. Brand name and the product.

3. Range of the product.

 4. Identification mark or logo.

 5. Tagline.

6. Labeling and packaging.

7. Price of the product and basis of price fixation.

 8. Selected channels of distribution and reasons thereof.

 9. Decisions related to transportation and warehousing. State reasons.

10. Promotional techniques used and starting reasons for deciding the particular technique.

11. Grading and standardization. Presentation and Submission of Project Report At the end of the stipulated term, each student will prepare and submit his/her project report. Following essentials are required to be fulfilled for its preparation and submission.

1. The total length of the project will be of 25 to 30 pages.

 2. The project should be handwritten.

 3. The project should be presented in a neat folder.

 4. The project report should be developed in the following sequence-  Cover page should include the title of the Project, student information, school and year.l

 List of contents. Acknowledgements and preface (acknowledging the institution, the places visited and the  persons who have helped).

 Introduction. Topic with suitable heading.l  Planning and activities done during the project, if any.

 Observations and findings of the visit.l  Conclusions (summarized suggestions or findings, future scope of study).  

Photographs (if any).  

Appendix  Teacher’s observation.   

Signatures of the teachers.l

 At the completion of the evaluation of the project, it should be punched in the centre so that  the report may not be reused but is available for reference only.  The projects will be returned after evaluation. The school may keep the best projects.

Hi all ,
               It is blue print for accounts & business for 2015-2016:

Units Chapters	Marks
Part A :   Accounting for Partnership Firms and Companies	60
Unit 1.    Accounting for Partnership Firms	35
Unit 2.   Accounting for Companies	25
Part B :   Financial Statement Analysis   Unit 3
Analysis of Financial Statements	12
Unit   4: Cash Flow Statement	8
Part  C :   Project Work	20

Business Studies

Units Chapters	Marks
Part A : Principles and Functions of Management
Nature and Significance of Management
Principles of Management	16
Business Environment
Planning	14
Organizing
Staffing
Directing
Controlling	20
Part B  : Business Finance and Marketing
Financial Management
Financial Markets	15
Marketing Management
Consumer Protection	15
Part C  Project Work	20
Total	100

 Thanks 

Ashwani

Current changes in provisions of debentures & shares

Hi students there are current changes in  debentures & shares :

Requirements of creation of debenture redemption reserve under companies Act 2013

Category of companies	Amount of debenture redemption reserve to be maintained
All India financial institutions regulated by RBI & banking companies.	No DRR is required for both public as well as privately placed debentures.
Other financial institutions within the meaning of section 4A.	25 % of the value of debenture issued through public issue. No DRR is required for privately placed debentures.
Non banking financial companies (NBFC) registered with RBI under section 45-IA of the RBI(Amendment ) Act 1997	25 % of the value of debenture issued through public issue. No DRR is required for privately placed debentures.
Other companies including manufacturing & infrastructure companies .	25 % of the value of debenture issued through public issue. 25 % of the value of debenture issued through private placement by listed and unlisted companies.

Rules regarding debenture redemption fund investment :

In addition to imposing the condition of creation of a DRR by every company for every issue of debentures; whether public or privately placed, the Circular 2013 further requires every such company to park, on or before 30^th day of April each year, a sum of at least 15% of the amount of its debentures, maturing during the year ending on the 31^st day of March next following, in any one or more of the following methods:

1. in deposits with any scheduled bank, free from charge or lien;
2. in unencumbered securities of the Central Government or of any state government;
3. in unencumbered securities mentioned in clauses (a) to (d) & (ee) of Section 20 of the Indian Trusts Act, 1882;
4. in unencumbered bonds issued by any other company which is notified under clause (f) of Section 20 of the Indian Trusts Act, 1882.

The money so parked can be utilized only for the purpose of repayment of debentures maturing during the year. The amount remaining deposited/ invested shall not at any time fall below 15% of the amount of debentures maturing during that year ending 31^stMarch.

The unclear language of Circular 2013 mandates not only every company; whether listed or unlisted, private or public, to create a DRR for their issues; whether public or private, listed or unlisted, it also imposes a stringent condition of parking a sum equal to 15% of the value of debentures maturing during the year separately in the beginning of the year itself.

Important of financial statement analysis:

1.       Holding Of Share
Shareholders are the owners of the company. Time and again, they may have to take decisions whether they have to continue with the holdings of the company's share or sell them out. The financial statement analysis is important as it provides meaningful information to the shareholders in taking such decisions.
2. Decisions and Plans
The management of the company is responsible for taking decisions and formulating plans and policies for the future. They, therefore, always need to evaluate its performance and effectiveness of their action to realise the company's goal in the past. For that purpose, financial statement analysis is important to the company's management.
3. Extension of Credit
The creditors are the providers of loan capital to the company. Therefore they may have to take decisions as to whether they have to extend their loans to the company and demand for higher interest rates. The financial statement analysis provides important information to them for their purpose.

4. Investment Decision
The prospective investors are those who have surplus capital to invest in some profitable opportunities. Therefore, they often have to decide whether to invest their capital in the company's share. The financial statement analysis is important to them because they can obtain useful information for their investment decision making purpose.

Meaning of share:

 Section 2(84) of the Companies Act, 2013 (hereinafter referred to as Act) “share” means a share in the share capital of a company and includes stock. It represents the interest of a shareholder in the company, measured for the purposes of liability and dividend. It attaches various rights and liabilities.

 Categories of Share Capital

 Share capital of the company can also be sub divided into following categories-

Authorized Capital– As per section 2(8) of Companies Act, 2013 “authorized capital” or “nominal capital” means such capital as is authorised by the memorandum of a company to be the maximum amount of share capital of the company;
Means Authorized or Nominal Capital is that amount of Capital upto which Company can issue its capital.

Issued Capital– As per section 2(50) of the Companies Act,2013″issued capital” means such capital as the company issues from time to time for subscription;
In simple words issued capital is that part of capital which have been issued for subscription.

Subscribed Capital- Section 2(86) of the Companies Act,2013 defines Subscribed Capital as such part of capital which is for the time being subscribed by the members of the Company. Means it is that part of issued capital which has been subscribed.

Paid up Capital– Section 2(64) of the Companies Act, 2013 provides “paid-up share capital” or “share capital paid-up” means such aggregate amount of money credited as paid-up as is equivalent to the amount received as paid up in respect of shares issued and also includes any amount credited as paid-up in respect of shares of the company, but does not include any other amount received in respect of such shares, by whatever name called;

Definition of Company:

Section 2(20) of the 2013 Act defines the term “company” to mean “a company incorporated under the Companies Act 2013 or any previous company law.” Accordingly, a company, which is incorporated under the relevant legislation of a foreign country, will not qualify as a “company” under the 2013 Act The proviso to section 2(71) states that “a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act.”

Definition of Private Company:

Section 2(87) defines the terms “subsidiary” in relation to any other company. The sub-section states that for the purposes of such definition, the expression company includes “body corporate”

Definition of company limited by shares:

As per section 2(22) of companies Act 2013  “company limited by shares” means a company having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them;

Definition of company limited by guarantee:

As per section 2(21) of companies Act 2013 “company limited by guarantee” means a company having the liability of its

members limited by the memorandum to such amount as the members may respectively

undertake to contribute to the assets of the company in the event of its being wound

up;

Definition of unlimited liability company:

As per section 2(92) of companies Act 2013 “unlimited company” means a company not having any limit on the liability

of its members;

Types  of share capital :

Equity Share Capital Section 43 of the Act provides that the share capital of a company limited by shares shall be of two kinds:

(a)    equity share capital— (i) with voting rights; or SHARE CAPITAL AND DEBENTURES 1 2 Share Capital and Debentures (ii) with differential rights as to dividend, voting or otherwise in accordance with such rules as may be prescribed; and (b) preference share capital: ‘‘Equity share capital’’,

(b)   With reference to any company limited by shares, means all share capital which is not preference share capital. As per section 43 (a) equity share capital may be divided on the basis of voting rights and differential rights(DVR) as to dividend, voting rights or otherwise according to the rules

Preference Share Capital:  The other type of share capital is the “Preference share capital”. According to section 55 of the Act, a company limited by shares cannot issue any preference shares which are irredeemable. However a company limited by shares may, if so authorized by its articles, issue preference shares which are liable to be redeemed within a period not exceeding twenty years from the date of their issue.

Section 52 (2) of companies Act 2013 Application of premiums received on issue of shares:

1. Transfer a sum equal to the aggregate premium amount as received to "securities premium account"; 2. The provisions relating to reduction of share capital of a company (under companies act) shall be applicable as if the securities premium account was the paid-up share capital of the company; 

3. The company may use the securities premium account for the following purposes.

Bonus shares: Paying up unissued equity shares of the company to be issued to members of the company as fully paid bonus shares; or

Writing off: Writing off expenses / commission paid / discount allowed on any issue of equity share capital or Writing off the preliminary expenses of the company.

Providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company;

Buy-back: Purchasing its own shares / other securities (under section 68).

Section 53 of companies Act 2013 issue of shares at discount:

Prohibition on issue of shares at discount.

1.     Except as provided in section 54, a company shall not issue shares at a discount.

2.     Any share issued by a company at a discounted price shall be void.

3.     Where a company contravenes the provisions of this section, 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 officer who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees, or with both.

Minimum Subscription:

The Securities and Exchange Board of India (Sebi) has prescribed a minimum subscription requirement for public issues of debt securities of 75 per cent of the offer, below which no allotment of debt securities should be made.

The issuer of equity share capital is at present required to make a declaration about the refund of the issue, if the minimum subscription of 90 per cent of the issue size is not received. However, for public issue of non-convertible debentures (NCDs), no such requirement is specified under Companies Act, 1956.

Further, existing SEBI ILDS Regulations (Regulation 12 of SEBI Issue and Listing of Debt Securities Regulations, 2008), allows the issuer to decide the amount of minimum subscription, which it seeks to raise from public through issue of NCDs and disclose the same in the offer document.

Companies Act, 2013 and (draft) Rules made under it also do not specify the quantum of minimum subscription needed in case of public issues (both for equity and debt), but only requires disclosure of the same in the offer document.

Current changes in syllabus class 12

Hi students there are current changes in  debentures & shares :

Requirements of creation of debenture redemption reserve under companies Act 2013

Category of companies	Amount of debenture redemption reserve to be maintained
All India financial institutions regulated by RBI & banking companies.	No DRR is required for both public as well as privately placed debentures.
Other financial institutions within the meaning of section 4A.	25 % of the value of debenture issued through public issue. No DRR is required for privately placed debentures.
Non banking financial companies (NBFC) registered with RBI under section 45-IA of the RBI(Amendment ) Act 1997	25 % of the value of debenture issued through public issue. No DRR is required for privately placed debentures.
Other companies including manufacturing & infrastructure companies .	25 % of the value of debenture issued through public issue. 25 % of the value of debenture issued through private placement by listed and unlisted companies.

Rules regarding debenture redemption fund investment :

In addition to imposing the condition of creation of a DRR by every company for every issue of debentures; whether public or privately placed, the Circular 2013 further requires every such company to park, on or before 30^th day of April each year, a sum of at least 15% of the amount of its debentures, maturing during the year ending on the 31^st day of March next following, in any one or more of the following methods:

1. in deposits with any scheduled bank, free from charge or lien;
2. in unencumbered securities of the Central Government or of any state government;
3. in unencumbered securities mentioned in clauses (a) to (d) & (ee) of Section 20 of the Indian Trusts Act, 1882;
4. in unencumbered bonds issued by any other company which is notified under clause (f) of Section 20 of the Indian Trusts Act, 1882.

The money so parked can be utilized only for the purpose of repayment of debentures maturing during the year. The amount remaining deposited/ invested shall not at any time fall below 15% of the amount of debentures maturing during that year ending 31^stMarch.

The unclear language of Circular 2013 mandates not only every company; whether listed or unlisted, private or public, to create a DRR for their issues; whether public or private, listed or unlisted, it also imposes a stringent condition of parking a sum equal to 15% of the value of debentures maturing during the year separately in the beginning of the year itself.

Important of financial statement analysis:

1.       Holding Of Share
Shareholders are the owners of the company. Time and again, they may have to take decisions whether they have to continue with the holdings of the company's share or sell them out. The financial statement analysis is important as it provides meaningful information to the shareholders in taking such decisions.
2. Decisions and Plans
The management of the company is responsible for taking decisions and formulating plans and policies for the future. They, therefore, always need to evaluate its performance and effectiveness of their action to realise the company's goal in the past. For that purpose, financial statement analysis is important to the company's management.
3. Extension of Credit
The creditors are the providers of loan capital to the company. Therefore they may have to take decisions as to whether they have to extend their loans to the company and demand for higher interest rates. The financial statement analysis provides important information to them for their purpose.

4. Investment Decision
The prospective investors are those who have surplus capital to invest in some profitable opportunities. Therefore, they often have to decide whether to invest their capital in the company's share. The financial statement analysis is important to them because they can obtain useful information for their investment decision making purpose.

Meaning of share:

 Section 2(84) of the Companies Act, 2013 (hereinafter referred to as Act) “share” means a share in the share capital of a company and includes stock. It represents the interest of a shareholder in the company, measured for the purposes of liability and dividend. It attaches various rights and liabilities.

 Categories of Share Capital

 Share capital of the company can also be sub divided into following categories-

Authorized Capital– As per section 2(8) of Companies Act, 2013 “authorized capital” or “nominal capital” means such capital as is authorised by the memorandum of a company to be the maximum amount of share capital of the company;
Means Authorized or Nominal Capital is that amount of Capital upto which Company can issue its capital.

Issued Capital– As per section 2(50) of the Companies Act,2013″issued capital” means such capital as the company issues from time to time for subscription;
In simple words issued capital is that part of capital which have been issued for subscription.

Subscribed Capital- Section 2(86) of the Companies Act,2013 defines Subscribed Capital as such part of capital which is for the time being subscribed by the members of the Company. Means it is that part of issued capital which has been subscribed.

Paid up Capital– Section 2(64) of the Companies Act, 2013 provides “paid-up share capital” or “share capital paid-up” means such aggregate amount of money credited as paid-up as is equivalent to the amount received as paid up in respect of shares issued and also includes any amount credited as paid-up in respect of shares of the company, but does not include any other amount received in respect of such shares, by whatever name called;

Definition of Company:

Section 2(20) of the 2013 Act defines the term “company” to mean “a company incorporated under the Companies Act 2013 or any previous company law.” Accordingly, a company, which is incorporated under the relevant legislation of a foreign country, will not qualify as a “company” under the 2013 Act The proviso to section 2(71) states that “a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act.”

Definition of Private Company:

Section 2(87) defines the terms “subsidiary” in relation to any other company. The sub-section states that for the purposes of such definition, the expression company includes “body corporate”

Definition of company limited by shares:

As per section 2(22) of companies Act 2013  “company limited by shares” means a company having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them;

Definition of company limited by guarantee:

As per section 2(21) of companies Act 2013 “company limited by guarantee” means a company having the liability of its

members limited by the memorandum to such amount as the members may respectively

undertake to contribute to the assets of the company in the event of its being wound

up;

Definition of unlimited liability company:

As per section 2(92) of companies Act 2013 “unlimited company” means a company not having any limit on the liability

of its members;

Types  of share capital :

Equity Share Capital Section 43 of the Act provides that the share capital of a company limited by shares shall be of two kinds:

(a)    equity share capital— (i) with voting rights; or SHARE CAPITAL AND DEBENTURES 1 2 Share Capital and Debentures (ii) with differential rights as to dividend, voting or otherwise in accordance with such rules as may be prescribed; and (b) preference share capital: ‘‘Equity share capital’’,

(b)   With reference to any company limited by shares, means all share capital which is not preference share capital. As per section 43 (a) equity share capital may be divided on the basis of voting rights and differential rights(DVR) as to dividend, voting rights or otherwise according to the rules

Preference Share Capital:  The other type of share capital is the “Preference share capital”. According to section 55 of the Act, a company limited by shares cannot issue any preference shares which are irredeemable. However a company limited by shares may, if so authorized by its articles, issue preference shares which are liable to be redeemed within a period not exceeding twenty years from the date of their issue.

Section 52 (2) of companies Act 2013 Application of premiums received on issue of shares:

1. Transfer a sum equal to the aggregate premium amount as received to "securities premium account"; 2. The provisions relating to reduction of share capital of a company (under companies act) shall be applicable as if the securities premium account was the paid-up share capital of the company;

3. The company may use the securities premium account for the following purposes.

Bonus shares: Paying up unissued equity shares of the company to be issued to members of the company as fully paid bonus shares; or

Writing off: Writing off expenses / commission paid / discount allowed on any issue of equity share capital or Writing off the preliminary expenses of the company.

Providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company;

Buy-back: Purchasing its own shares / other securities (under section 68).

Section 53 of companies Act 2013 issue of shares at discount:

Prohibition on issue of shares at discount.

1.     Except as provided in section 54, a company shall not issue shares at a discount.

2.     Any share issued by a company at a discounted price shall be void.

3.     Where a company contravenes the provisions of this section, 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 officer who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees, or with both.

Minimum Subscription:

The Securities and Exchange Board of India (Sebi) has prescribed a minimum subscription requirement for public issues of debt securities of 75 per cent of the offer, below which no allotment of debt securities should be made.

The issuer of equity share capital is at present required to make a declaration about the refund of the issue, if the minimum subscription of 90 per cent of the issue size is not received. However, for public issue of non-convertible debentures (NCDs), no such requirement is specified under Companies Act, 1956.

Further, existing SEBI ILDS Regulations (Regulation 12 of SEBI Issue and Listing of Debt Securities Regulations, 2008), allows the issuer to decide the amount of minimum subscription, which it seeks to raise from public through issue of NCDs and disclose the same in the offer document.

Companies Act, 2013 and (draft) Rules made under it also do not specify the quantum of minimum subscription needed in case of public issues (both for equity and debt), but only requires disclosure of the same in the offer document.