As all of you aware capital is the scarce resource for a corporate entity. It is not that easy to raise capital. The investors should be confident about your entity, if they have to part with your hard earned money.
Capital can be
1. Equity capital
2. Debt capital
Equity capital is the owners funds which is interest free and maturity free investments in the company. If your company is successful , transparent, profitable, having great future, equity may not be a constraint. But your company is in early stage, need capital for short term projects, do not want to lose control of the company etc, you can look for fixed interest bearing or cost bearing, fixed maturity investments from outsiders, it is called debts.
As the capital market started booming, more and more companies started tapping the capital market and luring investors. Some of them have become great corporations, but some of them vanished with the capital. To safeguard to possible extent the investors, Companies Act 2013 provides for some laws, rules .
The sections in Companies act, which explains, what is capital , how issue it and if it is debts, how the security need to be created. Also there are sections which will explain deposits and its terms.
For company secretary students or any corporate profession students the sections of relevant law is important.
Share capital and debentures - Sec 43-72
43. Kinds of share capital
44. Nature of shares or debentures
45. numbering of shares
46. Certificate of shares
47. Voting rights
48. Variation of shareholders’ rights
49. Calls on to be made on uniform basis
50. advance call
51. Payment of dividend in proportion to amount paid-up
52. premiums received on issue of shares
53. Prohibition on issue of shares at discount
54. Issue of sweat equity shares
55. Issue and redemption of preference shares
56. Transfer and transmission of securities
57. Punishment for personation of shareholder
58. Refusal of registration and appeal against refusal
59. Rectification of register of members
60. Publication of authorised, subscribed and paid-up capital
61. Power of limited company to alter its share capital
62. Right issue
63. Issue of bonus shares
64. Notice to be given to ROC of share capital
65. Unlimited company to provide for reserve share capital on conversion into limited company
66. Reduction of share capital
67. Restrictions on purchase by company or giving of loans by it for purchase of its shares
68. BUY BACK
69. Transfer of certain sums to CRR
70.Prohibition for Buy back in certain circumstances
71. Debentures
72. Power to nominate
DEPOSITS (Sections 73-76A)
73. Prohibition on acceptance of deposits from public
74. Repayment of deposits, etc., accepted before commencement of this Act
75. Damages for fraud
76. Acceptance of deposits from public by certain companies
76A. Punishment for contravention of section 73 or section 76
CHARGES (Sections 77-87)
77. Duty to register charges, etc
78. Application for registration of charge
79. Section 77 to apply in certain matters
80. Date of notice of charge
81. Register of charges to be kept by Registrar
82. Company to report satisfaction of charge
83. Power of Registrar to make entries of satisfaction and release in absence of intimation from company
84. Intimation of appointment of receiver or manager
85. Company’s register of charges
86. Punishment for contravention
87. Rectification by Central Government in register of charges
Important sections under each head is marked bold.