Question

Equity share capital​

Answer 1

Answer:

corporation's share capital[1] or capital stock (in US English) is the portion of a corporation's equity that has been obtained by the issue of shares in the corporation to a shareholder, usually for cash. "Share capital" may also denote the number and types of shares that compose a corporation's share structure.

In a strict accounting sense, share capital is the nominal value of issued shares (that is, the sum of their par values, sometimes indicated on share certificates). If the allocation price of shares is greater than their par value, as in a rights issue, the shares are said to be sold at a premium (variously called share premium, additional paid-in capital or paid-in capital in excess of par). Commonly, the share capital is the total of the aforementioned nominal share capital and the premium share capital. Conversely, when shares are issued below par, they are said to be issued at a discount or part-paid.Sometimes, shares are allocated in exchange for non-cash consideration, most commonly when corporation A acquires corporation B for shares (new shares issued by corporation A). Here the share capital is increased to the par value of the new shares, and the merger reserve is increased to the balance of the price of corporation B.

In practice, the concept of "par value" has very little meaning, since shares usually represent a residual claim; they do not endow their owners with a claim toward any fixed sum of money. In some jurisdictions, share par values have been either abolished or made optional, so a corporation can issue shares having no par value. In that case, from an accounting perspective, all of the corporation's share capital is premium.Besides its meaning in accounting, described above, "share capital" may also describe the number and types of shares that compose a corporation's share structure. A corporation might have an "outstanding share capital" of 500,000 shares (the "structure" usage); it has received for them a total of 2 million dollars, which is the "share capital" in the balance sheet (the accounting usage).

The legal aspects of share capital are mostly dealt with in a jurisdiction's corporate law system. An example of such an issue is that when a company allocates new shares, it must do so without inequitably diluting its existing shareholders.

Legal capital

Answer 2

$\huge{ \underline{ \overline{ \mid{ \mathfrak{ \red{ \: \: ANSWER \: \: } \mid}}}}}$

$\: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \texttt{Equity shares are the ordinary shares } \\ \texttt{of the company representing the part ownership} \\ \texttt{of the shareholder in the company. These are } \\ \texttt{long term source of finance. The investors of } \\ \texttt{the equity share have the right to vote, share } \\ \texttt{the profit and claun the assets of the company.} \\ \texttt{Equity shareholders are the owner of the company. }$

$\: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \texttt{The dividend rate on the equity share } \\ \texttt{is not fixed. It depends upon the profitability } \\ \texttt{of the company. Investors can invest in equity } \\ \texttt{shares either through primary market offerings } \\ \texttt{or in the secondary market.}$