Match List-I with List-II. Choose the correct answer from the given below: List - I List - II Minimum Subscription (I) Fundamental provisions & important clause of company’s constitution Prospectus (II) 90% of issued amount according to SEBI Reserve Capital (III) Invitation to the public for Subscription of shares Memorandum of Association (IV) Reserved portion of uncalled capital
(A)-(II), (B)-(III), (C)-(IV), (D)-(I)
Matching Company Law Terms: Minimum Subscription, Prospectus, MOA
The question asks us to match important terms related to company law and formation from List-I with their corresponding definitions or descriptions in List-II. Let's analyze each term in List-I and find its correct match in List-II.
Analyzing List-I and List-II Terms
- Minimum Subscription: This refers to the minimum amount of capital that a company must receive through share subscriptions before it can proceed with the allotment of shares. SEBI (Securities and Exchange Board of India) regulations often specify this amount. Looking at List-II, option (II) states "90% of issued amount according to SEBI", which is the standard definition for minimum subscription in many contexts involving public issues.
- Prospectus: This is a formal legal document that provides details about an investment offering for sale to the public. It invites the public to subscribe to shares or debentures of the company. Looking at List-II, option (III) states "Invitation to the public for Subscription of shares", which accurately describes the primary purpose of a prospectus.
- Reserve Capital: This is a special portion of the uncalled share capital of a company that a company resolves not to call up except in the event of the company being wound up. Looking at List-II, option (IV) states "Reserved portion of uncalled capital", which precisely defines reserve capital.
- Memorandum of Association (MOA): This is the fundamental document of a company, often considered its charter. It contains the basic rules and objectives that govern the company's operations and defines its relationship with the outside world. Looking at List-II, option (I) states "Fundamental provisions & important clause of company’s constitution", which is a perfect description of the Memorandum of Association.
Establishing the Correct Matches
Based on the analysis above, the correct matches are:
- Minimum Subscription (A) matches with (II)
- Prospectus (B) matches with (III)
- Reserve Capital (C) matches with (IV)
- Memorandum of Association (D) matches with (I)
Summary of Matches
| List-I (Term) | List-II (Description) | Match |
|---|---|---|
| (A) Minimum Subscription | (II) 90% of issued amount according to SEBI | A - II |
| (B) Prospectus | (III) Invitation to the public for Subscription of shares | B - III |
| (C) Reserve Capital | (IV) Reserved portion of uncalled capital | C - IV |
| (D) Memorandum of Association | (I) Fundamental provisions & important clause of company’s constitution | D - I |
Comparing these matches with the given options, we find that the combination (A)-(II), (B)-(III), (C)-(IV), (D)-(I) is the correct one.
Revision Table: Company Law Definitions
| Term | Key Definition/Purpose |
|---|---|
| Minimum Subscription | Minimum amount needed from share applications for allotment; often set by regulators like SEBI (e.g., 90% of issue size). |
| Prospectus | Document inviting the public to subscribe for shares/debentures, containing details about the company and offer. |
| Reserve Capital | Part of uncalled share capital set aside specifically to be called only during the company's winding up. |
| Memorandum of Association | Foundational constitutional document outlining the company's name, objectives, capital structure, and liability. |
Additional Information: Key Company Documents and Capital Concepts
Understanding these terms is crucial for comprehending how companies are formed and operate, especially public companies raising funds.
- Articles of Association (AOA): While the Memorandum of Association defines the company's external scope, the Articles of Association contain the internal rules and regulations for the management of the company's affairs. It deals with matters like the appointment of directors, conduct of meetings, transfer of shares, etc. The AOA is subordinate to the MOA.
- Types of Share Capital:
- Authorised Capital: The maximum amount of share capital a company is authorised to issue by its Memorandum of Association.
- Issued Capital: The portion of authorised capital that the company has offered to the public for subscription.
- Subscribed Capital: The portion of issued capital that the public has applied for and agreed to take.
- Called-up Capital: The portion of subscribed capital that the company has asked shareholders to pay.
- Paid-up Capital: The portion of called-up capital that shareholders have actually paid.
- Uncalled Capital: The portion of subscribed capital that has not yet been called up by the company. Reserve Capital is a part of this uncalled capital, specifically set aside.
- SEBI Guidelines: For public issues in India, SEBI plays a crucial role in regulating the process, including setting norms for minimum subscription and vetting the prospectus to ensure transparency and investor protection.
These concepts are interconnected and form the backbone of a company's structure and public fundraising activities.
Important Questions from Accounting for Share Capital
Nawab, Shanaya, and Hritik are partners sharing profits and losses in the ratio of 5 : 3 : 2. The partnership deed provides for charging interest on drawings @10% p.a. The drawings of Nawab, Shanaya, and Hritik were ₹20,000, ₹15,000, and ₹10,000, respectively. After final accounts have been prepared, it was discovered that interest on drawings had not been charged. The adjusting entry will be:
Mr. Kunal withdrew ₹10,000 per month at the end of each month from a firm for his personal use during the year ending March 31, 2022. What will be the interest on drawings if charged @8% p.a.?
What are the accounting aspects that are involved at the time of retirement or death of a partner?
(A) Ascertainment of profit or loss up to the date of retirement or death of partner.
(B) Realisation of assets and liabilities that are shown in the books of Accounts only.
(C) Adjustment of capital.
(D) Calculation of new profit sharing ratio and gaining ratio.
(E) Treatment of Goodwill
Choose the correct answer from the options given below:
On retirement of a partner, the retiring partner’s capital account will be credited with:
Which of the following are shown in Revaluation A/c?
(A) Unrecorded Asset
(B) Workmen Compensation Reserve
(C) Decrease in fixed Asset
(D) Increase in Inventory
(E) Drawings of partner
Choose the correct answer from the options given below:
