Quick Answer: What is the nature of share application account?

Is share Application account a liability account?

Share application money may be reported on a balance sheet as current liability. … The excess of application funds is actually a current liability to a company.

What is the nature of share forfeiture account?

A forfeited share is an equity share investment which is cancelled by the issuing company. A share is forfeited when the shareholder fails to pay the subscription money called upon by the issuing company.

What is the nature of share capital?

The words capital and share capital are synonymous in the case of a joint company. Share capital means the capital raised by the company by issue of shares. Ins short, there is one consolidated capital account called share capital account.

What is the share application account?

Share application money is called from the share holders to issue the shares. This money is contributed by the many persons, hence to be treated as personal account till the allotment of shares is done.

Where is share application money on balance sheet?

In cases like this, until the shares are allotted, the amount received is shown under the Share Application Money Pending Allotment. It comes under the head of the Liabilities in the Balance Sheet, in correspondence to the Cash and equivalents on the Assets side.

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What happens when shares are forfeited?

What Is a Forfeited Share? … When a share is forfeited, the shareholder no longer owes any remaining balance and surrenders any potential capital gain on the shares, which automatically revert back to the ownership of the issuing company.

What is the result of forfeiture of shares?

This contract makes it binding upon the shareholder to pay-up the amount due on the issue price of the share when company calls for it through the call on shares. … Shares which are forfeited will no longer remain the shares of that shareholder. The money paid by that shareholder is also not refundable by the company.

What is nature of share?

‘A share is the interest of a shareholder in the company measured by a sum of money, for the purposes of liability in the first place, and of interest in the second, but also consisting of a series of mutual covenants entered into by all the shareholders in accordance with (now sec33(1) of the Companies Act 2006).

What is the nature of share in a company?

Shares as property means that shares have value. Shares must be issued by a company in return for payment. The shares of a company are its property in the sense that only the company can control its shares. However, when issued to a person, shares become the property of that person.

What are the types of share?

Most classes of share will fall into one of the below categories of types of share:

  1. 1 Ordinary shares. These carry no special rights or restrictions. …
  2. 2 Deferred ordinary shares. …
  3. 3 Non-voting ordinary shares. …
  4. 4 Redeemable shares. …
  5. 5 Preference shares. …
  6. 6 Cumulative preference shares. …
  7. 7 Redeemable preference shares.
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