NCERT Class 12 Books Accountancy Part 2 Chapter 1- Accounting for Share Capital

Safalta Expert Published by: Noor Fatima Updated Wed, 13 Jul 2022 05:25 PM IST


Here is the information about NCERT Class 12 Books Accountancy Part 2 Chapter 1. You can give a read to this blog and get PDFs of the subject. 

NCERT Class 12 Books Accountancy Part 2 Chapter 1- Accounting for Share Capital is accessible here for download purposes. You can download the PDF for and learn from the book anytime you want.

Students who are studying in Class 12 and candidates who are preparing for competitive exams can download the PDF for NCERT Class 12 Books Accountancy Part 2 Chapter 1- Accounting for Share Capital to learn from the reading material.  

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These papers can help you prepare for your exams in a better way.

Here, you can learn the NCERT Class 12 Books Accountancy Part 2 Chapter 1- Accounting for Share Capitall. Moreover, you can get the links for other chapters to download the links. 

Accounting for Share Capital Goes Like This-


After studying this chapter, you will be able to-
  • Explain the basic nature of a joint stock company as a form of business organisation and the various kinds of companies based on liability of their members
  • Describe the types of shares issued by a company
  • Explain the accounting treatment of shares issued at par, at premium and at discount including oversubsription
  • Outline the accounting for forfeiture of shares and reissue of forfeited shares under varying situations
  • Workout the amounts to be transferred to capital reserve when forfeited shares are reissued; and prepare share forfeited account
A company form of organisation is the third stage in the evolution of forms of organisation. Its capital is contributed by a large number of persons called shareholders who are the real owners of the company. But neither it is possible for all of them to participate in the management of the company nor considered desirable. Therefore, they elect a Board of Directors as their representative to manage the affairs of the company. In fact, all the affairs of the company are governed by the provisions of the Companies Act, 2013. A company means a company incorporated or registered under the Companies Act, 2013 or under any other earlier Companies Acts. According to Chief Justice Marshal, “a company is a person, artificial, invisible, intangible and existing only in the eyes of law. Being a mere creation of law, it possesses only those properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence”. A company usually raises its capital in the form of shares (called share capital) and debentures (debt capital.) This chapter deals with the accounting for share capital of companies.

1.1 Features of a Company

A company may be viewed as an association of person who contribute money or money’s worth to a common inventory and use it for a common purpose. It is an artificial person having corporate legal entity distinct from its members (shareholders) and has a common seal used for its signature. Thus, it has certain special features which distinguish it from the other forms of organisation.

These are as follows-

Body Corporate: A company is formed according to the provisions of Law enforced from time to time. Generally, in India, the companies are formed and registered under Companies Law except in the case of Banking and Insurance companies for which a separate Law is provided for.

Separate Legal Entity: A company has a separate legal entity which is distinct and separate from its members. It can hold and deal with any type of property. It can enter into contracts and even open a bank account in its own name.

Limited Liability: The liability of the members of the company is limited to the extent of unpaid amount of the shares held by them. In the case of the companies limited by guarantee, the liability of its members is limited to the extent of the guarantee given by them in the event of the company being wound up.

Perpetual Succession: The company being an artificial person created by law continues to exist irrespective of the changes in its membership. A company can be terminated only through law. The death or insanity or insolvency of any member of the company in no way affects the existence of the company. Members may come and go but the company continues.

Common Seal: The company being an artificial person, cannot sign its name by itself. Therefore, every company is required to have its own seal which acts as official signatures of the company. Any document which does not carry the common seal of the company is not binding on the company.

Transferability of Shares: The shares of a public limited company are freely transferable. The permission of the company or the consent of any member of the company is not necessary for the transfer of shares. But the Articles of the company can prescribe the manner in which the transfer of shares will be made.

May Sue or be Sued: A company being a legal person can enter into contracts and can enforce the contractual rights against others. It can sue and be sued in its name if there is a breach of contract by the company.

Some Glimpses of the Chapter are-

NCERT Class 12 Books Accountancy Part 2 Chapter 1- Accounting for Share Capital- PDF Download

Chapter 1- Accounting for Share Capital

Where can you download 'Accounting for Share Capital' PDF?

Candidates can download NCERT Class 12 Books Accountancy Part 2 Chapter 1- Accounting for Share Capital PDF for free on our page. Links are given below.

Chapter 1- Accounting for Share Capital

Why is NCERT Class 12 Books Accountancy the best study material?

The book can also help in clarifying doubts. Other benefits of studying from the NCERT Class 12 Books Accountancy are-
  • Students gain profound knowledge about Accountancy through the NCERT Books Class 12 Accountancy
  • The course books contain pictures that can help students in better understanding of the chapters
  • These books can help students in self-study

Are CBSE Books for Class 12 Accountancy important from an examination perspective?

The chapters in CBSE Books for Class 12 Accountancy are vital for board exams and higher classes. Students should read the chapter given in the CBSE books for Class 12 Accountancy. These stories and practice questions can help gain excellent marks.

To get outstanding marks, we provide mock test papers that can help gear-up your preparations for exams. Additionally, you can also download e-books to get yourself prepared even in a better way.

Why is NCERT Class 12 Books Accountancy so recommended for board exams?

Almost all the questions that appear in board exams are from NCERT Books Class 12 Accountancy. Moreover, a team of professional teachers drafts these books, which become a reliable source of study for students.

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