Chapter 1: Accounting for Share Capital

How does a company raise capital?


Company form came into existence after industrial revolution due to limitations of proprietorship and partnership firms in carrying out business on a large scale.
In the modern age, capital is required for business. So, company collects its own capital from several persons. Joint stock company is an association of persons and has an objective of carrying out some business for profit.
Company has a separate legal existence by law. Incorporation, management, and winding up of company are governed by the provisions of Companies Act.
In India, a separate act for companies was first made in 1956. It is known as Companies Act, 1956. Recently the Indian Government has incorporated New Companies Act, 2013 after necessary amendments in the previous Act.

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