Short Note - 02

1. Bonus Share :
   The company may capitalized accumulated resources and profits by the issues of share called bonus share. Companies issue bonus share to its shareholders when it makes enough profit. But it has little in cash to pay cash as dividend. The articles of the company must permit the issue of such bonus shares. Like the right shares, the bonus shares are also issues to the existing shareholders in proportion to their share holding and dividend rights. But bonus share cannot be renounced.
   The requirements of issuance of bonus share are as follows-

• The article of the company must permit the issuance of bonus share.
• The authorized capital must be sufficient to cover the same.
• The share holders must resolve to capitalize profits or to apply the share premium account or utilized other reserves and issues bonus share.
• The share must be allotted by a board resolution in the proportions determined by shareholders in general meeting.
• A return on allotment must be submitted to the registrar within 60(sixty) days after allotment of share.

1.  Statutory Auditor:

Statutory auditor refers to the external certified public accountant, i.e., external auditor. He is an external service supplier; in charge of certifying the financial statement according to specific professional auditing standards .Statutory auditor review the accuracy of a company’s a governments financial record.

1. CDBL (Central depository Bangladesh limited ):
   CDBL was incorporate as a public limited company’s on august 2000 to operate and maintain the CDs of electronic book entry, Recording and maintaining securities accounts and registering transfer of securities; changing the ownership without any physical movement or endorsement of certificates and execution of transfer instruments. Bangladesh SEC has issued a certificate to CDBL on December 23, 2003 for starting depository business as a depository.
   “Central depository” mean a company formed to establish and operate a system for the central handling of securities, whereby such securities are deposited with and hold in custing by the company as a nominee for the depositors and dealing in report of such securities are elected by means of entries in securities accounts without physical delivery of scrips.
   The role of CDBL is to provide facilities for:

• Holding eligible securities in accounts.
• Dematerialization and re-materialization of eligible securities.
• Debiting and crediting securities to an account.
• The settlement of transactions.
• Pledging ,un-pledging and confiscation of eligible securities.
• Lending and borrowing of eligible securities
• Freezing and unfreezing of eligible securities
• Report to CDBL participants, Issuer and direct a/c holders.

The initials CDBL stand for “Central Depository Bangladesh Limited” which is a joint venture company set up by banks, Stock exchange, Asian Development Bank and other institutions operates the CDs in Bangladesh.

CDBL was incorporated as a public limited company on 20^th August ,2000, the objective of which was to initiate ,implement and operate the CDs in this country.

CDBL, by transferring physical certificate into electronic from will abolish the risks of damages, lost ,forged and duplicate share certificates, Since the operation method under this system is very speedy .

So, Transfer deliver, selling and buying are done instantly.

1. Dematerialization :
   To act effecting in depository system, the securities are kept in a dematerialized from .However, dematerialization is a process by which physical certificates are converted in to electronic from for credit to the investors accounts in the depository. To hold securities in CDBL, the securities must be dematerialized before the broker sells or buys shares.
   According to the depositories act’1999 ,the transfer of every eligible securities should be in the account of depository ,So, before selling or buying any share through the depository ,it must be dematerialized.
2. EGM (Extra-Ordinary General Meeting ):
   All ordinary or general meeting of the company other then AGM are called extra-Ordinary general meeting.In other words,when a meeting is called on an emergency or on special ocoarion ,it is called EGM.
   An EGM is called when :

• There is same special business to be transacted,or
• According to articles it can’t be transacted at an AGM, or
• If it can be done at an AGM ,it so urgent that it can’t be deferred till the next AGM.

An EGM may be called in the following ways :

• By directors
• By Directors on the requisition of the shareholders
• By the shareholders /Requisitions
• By the court.

1. Record Date :
   The last date on which any dividend on a stock that has been declared but not distributed belongs legally to the buyer, rather than the seller, that is ,when one sells a stock on or before the record date ,the dividend will go to the seller, In practical terms, the record date is the trading day immediately before the ex-dividend date, It is also called the date of record.
2. Independent Director :
   Independent director means a director who either does not hold any share in the company or holds less than one (1%) percent shares of the total paid –up shares of the company and she/he is not a sponsor of the company and is not connected with the company’s any sponsor or director or shareholder who holds one percent (1%) or more shares of the total paid-up shares of the company on this basis of family relationship. His/her family members also should not hold above mentioned shares in the company.
3. Registrar :
   The registrar is the authority of the office of the registrar of Joint Stock Company and firms Bangladesh. The registrar of joint stock companies and firm (RJSC) is the sole authority which facilities formation of companies etc. and keep track of all ownership related issues as prescribed by the laws in Bangladesh. RJSC deals with the following types of entities:

• Private companies
• Public Companies
• Foreign Companies
• Trade organization
• Societies
• Partnership firm

RJSC accords registration and ensures lawful administration of the entities under the provision of applicable act.

1. Asset Management :

1. The management of a clients reinvestments by a financial services company usually an investment bank.The company will invest on behalf of its clients and give then access to a wide rouge of traditional and alternative product offering that would not be to the average investor.
2. An account at a financial institution that includes checking service, credit cards, debit cards, margin loans ,the automatic sweep of cash balances in to money market fund ,as well as brokerage services.
   
   

1. Minutes :
   Official’s records of the proceedings of the meeting kept as a record be called minutes .In other words, minutes may be defined as the records of meeting. It is a summary or record what is said or decided at a formal meeting of board of directors or shareholders of the company.
   Actually, They are records of the events took place at a meeting. The object of keeping minutes is to preserve an accurate copy of officials document of the proceeding of the meeting .So that it may be produced before the court of law or any other authorized body in times of necessity.
   The rule regarding minutes are as follows:

• Obligation to keep minutes
• Signature and evidence
• Inspection of the minues
• Having copies of minutes by the member
• Defamatory and irrelevant matter to be excluded
• Prima facie eridevoc
  
  

1. Shareholders Register :
   A list of action owbers of a companys shares, updated on an ongoing basis.The shareholder register required that every current shareholder be recorded.The register includes each persons name,address and number of shares held,but can further detail the holders occupation and price paid.the shareholder register is fundamental to the examination of the ownership of the company.
2. Defunct Company :
   This category is for companies act that were once significant ,but are now defunet,which means they no longer exsit.

• Some were driven out of business by compentitions
• Some simply stopped operation
• Some went bankrupt
• Some were marged with or acquired willingly through sale to other companies, or bought hostile takeover,

Some companies may continue to operate under their old name but as a subsidiary of a parent company.

1. One man meeting :
   Any meeting held in one man company is called one man meeting,One man company is a company in which only on man is owner of a business holds the entire capital in the form of fully paid up shares with a few extra members holding one two shares each ,but truly speaking they are the nominees of the former. Thus, one man meeting held by only one person who is the owner of the business.
2. SEC’s  Directives for submission of accounts (Un-Audited & Audited ):
   The annual report required to be furnished by an issuer of a listed security shall be includes :

• A balance sheet
• Profit and loss accounts
• Cash flow statement
• Notes to the accounts.

                The financial statement should be prepared in accordance with the requirements laid down in the schedule and IAS.

                The financial statement shall be audited by a partnership firm of chartered accountants.

                The financial statement shall be audited within 120 (one hundred and twenty ) days the date on which the issuers financial year ends.

                A copy of such audited financial statement shall be submitted to the commission and the stock exchanges within 14 (Fourteen) days thereof.

1. Private placement of share/Pre-IPO placement :
   Private placement is a cheaper method of issuing shares. Under this method new securities are sold directly to large institutional investor instead of being sold to the general public, Such as foreign fund managers.
   If any issuer make private placement with investors, the amount so placed including the means and address of such investors shall be disclosed in details in the financial structure section of the prospectus.
   Private placement is more appropriate to smaller issue.
2. Dividend :
   Dividend is the share of profit payable  to the shareholder. The aspect of payment of Dividend can be judged from two standpoints statutory and accounting. On the statutory standpoint dividend is governed by regulations 96 to 103 of the first schedule of the Act of which regulation 97 is the mandatory provision.
   But regulation 96 is more important .It is provided in that regulation that dividend once declared must be paid and disabused within two months from the date of declaration .Regulation 98 is also notable which provides that no dividend shall be paid otherwise then out of profit of the company.
3. Interim Dividend :
   A dividend to be payment made before AGM and financial statement of a company’s. This declared dividend usually accompanies the company’s interim financial statement .An interim dividend may be distributed by the board of directors in the current year on condition that the article of association (AOA) empower then to do so.
4. Specy Dividend :
   When a parent company issue its subsidiary or sister concerns share as dividend to its (Parent ) Shareholders then it is called specy dividend.
   Examples:
   When square pharma issue 1:2 ratio shares of square textile to square pharmas shareholder. It will be treated as specy dividend .If any investor has 2 (Two) share of square pharma then he will get at true of cost 1(one) share of square textile .
5. Property Dividend :
   An alternative to cash or stock dividend .A property dividend can either include shares of a subsidiary company or physical assets such as inventories that the company holds .The Dividend is recorded at the market value of the asset provided from a corporate perspective ,property dividends can be distributed it the parent company does not wish to dilute its current share position or if it does not have enough cash on hand to distribute healthy payments.

aaa) Liquidating dividend :

A type of payment made by a corporation to its shareholders during its partial or full liquidation .Liquidating dividends are not paid solely out of profits of the corporation. Instead, The entire amount of shareholders equity is distributed, when a company has more liabilities than assets equity is negative and no liquidating dividend is made at all.

A dividend may be referred to as liquidating dividend when a company:

• Goes out of business & the net assets of the company are distributed to shareholders , or
• Sells of portion of business for cash & the proceeds are distributed to share holders.

bbb) Stock Dividend :A dividend payment made in the form of additional shares ,rather than a cash payment .Companies may decide to distribute stock to shareholders of record if the company’s availability of liquid cash is an short supply. These distributions are generally acknowledge in the form of fractions paid per existing share. An example would be a company issuing a stock dividend of 0.05 shares for each single share held.

ccc) Share :

Share is the unit of capital measured by the sum of money. It is intangible by very much movable property .The capital of a company is divided in to shares, which is distinguished by its appropriate members. The shares are contained in a certificate when is transferable.

Features of Shares:

• Share is the unit of capital measured by sum of money
• According to company’s act-1994, Sec 30(1) share is a movable property and shall be transferable in manner provided by the articles of the company.
• Ownership of share creates some contractual right, responsibility and liability.
• According to companies Act-1994, Section 30(2), each share in a company having a share capital ,which is distinguishes by the appropriate.
• Share is the personal estate of shareholders with his interest in the company.
  ddd)  share warrant :
  Share warrant is a document issued by a public limited company (not a private company) in respect of fully paid shares. A public limited company limited by shares authorized by its articles for issuance of share warrant its common seal.
  Following are the conditions for issue of a share warrant.

• Only a public limited company limited by share may issue Share warrant.
• A public ltd. Co. must authorized by its articles for issuance for Share warrants.
• The share are fully paid up and stamped properly.
• The total no. of shares is mention in the share warrant
• Annual report of the company includes a detail description about share warrant .

Section 50(1) on the issue of share warrant the company must enter the following particulars in the register of member.

• The data of issue of warrant
• The fact of the issue of the warrant
• The statement of share included in the warrant distinguishing each by its member.

If default is made in complying with the requirements of this section. It shall be liable to a fine not exceeding tk.200 (two hundred) for every day during which the default continues and every officer of the company pay who knowingly and willfully continues or permits the default shall be liable to a like penalty.

Short Note CLSP: 01

Short Note

1. Insider Trading/Dealing :
   If a person dealing with in company securities with a view to meeting a profit or avoiding loss while in possession of information that it generally known would affect their price. (It is prohibited from such dealing as per securities act.).Those who are or have connected with a company (e.g. Directors company secretary, employees, potential advisors) are prohibited from such dealing as well as restricted to convey the information to outsiders has access to the insiders information of a company and based on that he makes profit /Gain on trading of share of that company then he will be called an insider trading.
2. Mutual Fund :
   Mutual funds mean any fund comprising of multiple shares of listed securities. Now-a-day there is the mutual fund company, which from various sources of mutual fund.
   Mutual fund is the financial innovation of the 20^th century .It provides for a novel way of mobilizing savings from small investors and allowing them to participate in the equity of securities of the industrial organization with less risk.
   In a mutual fund, a group of investors pool their money. Which is invested in the various financial securities, the return obtained from the investment is shared among the investor in proportion to their investment. The mutual fund also employs a professional team to carry out the investment. The main feature of a mutual fund is that it makes diversification of portfolio a possibility for the small investors who otherwise may not be able to do so.
3. IPO :
   When any public ltd. Company (PLC) offers general public to subscribe its share through a prospect, that offer is said initial public offer (IPO). Business is like a wheel. It keeps moving and as it moves, it expands when it is expands, its need further fund to finance the expansion. Then need collect fund through IPO.
4. Price sensitive information (PSI) :
   Price sensitive information is such information, by the disclosure of which might affected market price at the respective securities. PSI may contain any of the following ------

• Dividend related information
• Any sort of financial specification
• Declaration of bonus share
• Declaration of right share
• Extension or Disposal decision of companies fixed assets.

1. Special Resolution : [Sec-87 (2)]
   A special resolution is a resolution of members passed by three fourth (3/4) majority as explained under extra-ordinary resolution .of which not less than 21 days notice has been duly given and intention to propose such resolution as special resolution has been specified in the notice [sec-87(2)]
   Under the act following business are transacted by special resolution.

• Alteration of the name of company [Sec-11]
• Alteration of articles of association [Sec-20]
• Alteration of memorandum of association [Sec-12]
• Valuation of share holders rights
• Reduction of share capital of the company [Sec-59]

1. Ordinary Resolution :
   When a resolution is passed by a simple majority of the votes of the members entitled to vote either in person or by proxy its is called ordinary resolution .(The matter which are not required special resolution as per provisions of the company act or of the article of the company to be done ,can be done by means of an ordinary resolution.) To pass an ordinary resolution no special time limit is required but normal time is to be no special time is required but normal time is to be maintained which is 14 clear days .
   The following business may be transacted by an ordinary resolution ------

• Adoption of statutory report [Sec-83]
• Declaration of dividend
• Issue of shares at a discount [Sec-153]
• Adoption of annual accounts [Sec-183]
• Appointment of auditor & fixed their remuneration [Sec-210]

1. Extra Ordinary resolution :
   An extra ordinary resolution is the resolution passed by a majority of not less then three forth (3/4) of such members as being entitled to be present either in person or by proxy. The intention to pass such resolution as extra ordinary resolution has been specified in the notice. The length at the notice in this case is 14 clear days. Extra ordinary resolutions are passed for very limited instances and mainly in winding up cases.
2. OTC:
   OTC Stands for over the counter .This is are kind stock exchange where non listed and de-listed securities are traded.
3. Managing Agent :
   Managing Agent means a person, firm or company by whatever named who or which is entitled to the mgt. of the whole affairs and business of a company by virtue of an agreement with the company and under the control and direction of the directors except to the extant if any, otherwise provided for in the agreement.
   Managing agent is a person ,firm a company entitled to the management of the whole affairs of a company by virtue of an ago agreement with the company and under the control & direction of the directors except to the extent ,if any otherwise provided for in the agreement.
   The minimum term of managing agent is 20(Twenty) years managing agent can be re-appointed after completion of first 10(Ten) years and in all for 20(Twenty) years.
4. Floating Charge :
   A floating charge is an equitable charges an some or all of the assets of the companies either present or future.
   When a company creates floating charge on some of property it cannot make further charge on that particulars property unless allowed by previous charge, Debentures are unusually secured by allotting charge on the assets of the company, Characteristics:

• It should be a charge upon class of assets both person & future.
• The class of assets charged must be one which in the ordinary course of business of the company would be changing from to time.
• It should be contemplated by the charge that until any step is taken by the mortgage, the company shall have the right to use the assets of the property charged in the ordinary course of business.

1. Quorum of board meeting :
   The quorum requisite for directors meeting is subject to the provision of the articales of association of the company ,regulation 89 of the companies act.,Howover provides that the quorum necessary for the transaction of business at the board meeting may be fixed by the directors and unless so fixed, it shall be three.
   Business of the board meeting will be valid it only quorum requisite is present. if a board meeting there is no quorum, the meeting will be automatically adjourned to the same day next week at the same time and place, if the day to which the meeting is adjourned is a public holiday then the meeting will be held next working day.
2. Pre IPO placement or Private placement of share :
   Private placement is a cheaper method of issuing shares ,under this method new securities are sold directly to large institutional investor instead of being sold to the general public such as foreign fund manager.
   If any issuer make private placement with investor the amount so placed including the names and address of such investor shall be disclosed in details in the financial structure section of the prospectus. Private placement is more appropriate to smaller issue.
3. Transfer & Transmission of share :
   Transfer of share denotes a voluntary passing of property in certain share from one person to another by presenting to the company a duly stamped instrument of transfer ,by or on behalf of the transferor or transferee .Containing their names, address & occupation along with the share certificates relating to the share to be transferred.
   Requirement transfer of share:

• Instrument of transfer to be delivered to the company
• Instrument of transfer to be signed
• Instrument of transfer to be in the prescribed form
• Stamp duty & endorsement
• Notice of transfer

Transmission of share :

Transmission of share is the processing of the title and rights of share from one person to another on the happening of certain events like :

• By death
• By insolvency
• By insanity and other similar events.

In all such cases the legal representative or the officer assignee or receiver or administration appointed by the court shall be entitled to the share.

1. Book-Building Method :
   Book-Building method means the process by which an issuers attempts to determine the price to offer its security based on demands from institutional investor. It is also a capital issuance process used in IPO which bids price and demand discovery. It is a process used for marketing a public offer of equity share of a company .It is mechanism where, during the period for which the book for the IPO is open bids are collected from investors at various prices, which are above or equal to the floor price. The process aims at tapping with wholesale and retail investor.
   The offer issue price is taken then determined after bid closing date based on certain evalution criteria.
2. Director Report :
   The Directors have to make out a short resume on the activities of the company which is called directors report. This is to be attached to be annual accounts which are placed before the general meeting for consideration of the shareholders. The director report should indicate any changes which may have accrued during the financial year:

• In the nature of the company’s business
• In the company’s subsidiaries or In the nature of their business
• Generally in the classes of business in which the company has same interest.
• About relevant details of material changes & commitments.

 Director’s report should deal with the company’s affairs in general & indicate the amount recommended as dividend and the amount proposed to be carried to reserves. It should also mentioned about any significant change taking place between the data of balance sheet and of the report.

1. Divisible profits :
   Divisible profits are those profit which can be legally distributed to the shareholders of a company in the form of dividend.
   No dividend shall be paid otherwise then out of profit of the year or other undistributed profits.
   The company law does not lay down the manner in which the profit of the company is to be ascertained. It also does not define as to what profit can be distributed as dividend.
2. Corporate Governance :
   Corporate governance refers to the structures & process for the direction & control of companies.Corporate Governance concerns the relationship among the management ,Board of directors controlling shareholders,minority shareholders and other stakeholders.
   Good corporate governance contributes to sustainable economics development by enchancing the performance of companies and increasing their access to outside capital .To ensure interest of shareholders and the wider community .The corporate governance concern the following matters :

• The responsibility of directors
• The appropriate composition of the board of directors
• The necessity for good internal control and audit committee
• The relationship with external auditors.

It is particular important for publicly traded companies because large amount of money are invested in them, either by small share holders, or from person schemes and other financial institutions.

1. Fixed charged & Floating charge :
   A charge on property is created when it is made liable for the payment of the money .A charge may be fixed or floating.
   A fixed charge in one which create legal interest of a specific property of the company or all the property of the company .Thus a fixed is equivalent to a mortgage .The company can sell ,lease etc. of the property subject to the right of the charge holder.
   The floating charges does not amount of mortgage .The owner of such a property can deal with it and the transferee gets it, free of charge.
2. Official liquidator :
   An official liquidator is a senior government official who is appointed by the court and undertakes all the responsibilities to process the winding up till it is dessolute.
   Power of an official liquidator is two fold .One  is as directed or empowered by the court and other virtue of the position he hold as a official liquidator.

• Sue on behalf of the company
• Continue business of the company
• Honor any contruct of the company before winding up
• Sell the property of the company
• Make agreement on behalf of the co.
• Take Doan on behalf of the co.

1. Resolution by circulation :
   If provided in the articales, the director may pass a resolution by circulation ,Sign by all the director without convening  a board meeting ,but passing of a resolution of circulation does not constitute the holding  of a board meeting. It is to be passed only in cases where calling of a board meeting may not be convenient. Such a circular resolution must be recorded in the immediate following board meeting and will from part of minutes of the said meeting .Resolution passed by circulation helps curtail recurrence of board meeting for routine matter.
2. Return on allotment :
   The return on allotment is a document which is required to file with the register within 60 days of the allotment of share. Where a company having a share capital makes any allotment of its shares, It requires to file a return in which the following particular shall be stated .
   
   

• The number & nominal amount of share allotted
• The name ,Address & occupations of the allot tees
• The amount paid or due and payable on each share
• Except bonus share of the share are allotted as fully or partly paid up for consideration other then in cash, the copies of the agreements duly stamped and verified in the prescribed manner.

1. Prospectus :
   Prospectus is an invitation to the public to subscribe to the share capital of any company .A the need for capital generation by a public limited company is materialized through the issuance to the prospectus. This invites the public to subscribe its share or debentures actually it is a printed pamphlet circulated and advertised in the newspaper .A copy of the prospectus dated and signed by the directors must be filed with the RJSC before publication .It must also be in agreement with the conditions paid down by SEC.
   List of some specific requirements:

• Name of the company with date of incorporation
• Date of the prospectus
• Consent of the SEC
• Capital outlay
• Business management background and prospect in brief
• Name of the director with address & other particulars
• The Qualifying share of directors
• Remuneration of the directors
• The minimum subscription on capital
• The name & address of vendors if any and the mode of payment of purchased price and goodwill ,if any
• The underwriting commission or brokerage, if any ,payable for effecting sale of share.
•  The amount to be paid during application & allotment
• The amount ,if any ,to be paid to the promoters and the mode of payment
• Name of the director with address
• The number of clauses of shares, if any ,& the nature & extend of the interest of the holders in the property and profit of the Co.
• The estimated amount of preliminary expenses
• Dividend policy and the expected dividend to be declared by the company
• The risk factors involved
• The rights of voting of each class of shareholders where share are so classified.
• A report by auditors on profit and the dividend declared
• Bankers and bankers/manager to the issue
• Contents of the memorandum etc.

1. Statement in lieu of prospectus :
   One of the intention of form a public limited company is to raise its capital from the general public ,when in public limited company purchased its capital from private arrangement a statement in lieu of prospectus is submitted to the registrar in the absence of prospectus ,This statement most be signed by every person who is named therein in a director or a proposed director of the company or by its agent authorized in writing in the form and containing the particulars as set out in the formats in schedule- IV including part -i & iii. When minimum subscription is not collected public limited company prepares statement in lieu of prospectus. It cannot invite public for purchase of any share or debentures.
2. Short Selling of share :
   Short selling means selling of any share/debentures in the trading system of stock exchange without having ownership of that instrument or without processing the same short selling is prohibited in the securities law.
   Example:
   Suppose Mr. Toufiq have only 50 share of musa pharma.If he sells 100 shares in the trading system of stock exchange, Then it will be called a short selling.
3. Office of profit :
   Any director other then managing director is restricted from accepting any office of profit in the company other than his directorship .The term “office of profit “inherently bears the meaning of salary and other benefits from the company. The board of director may appoint the managing director and fix his salary and other benefits .Any other directors cannot accept such an office of profit without the consent of the company in the general meeting as prescribed in section by.
4. Common Seal :
   Every registered company is an inanimate person that person also signs and the common seal is its signature. The common Seal means the name of the company engraved in legible characters embossed (to decorate with letters) and mounted (organized) on a seal hold this is apart from the rubber stamps of the company and carry statutory importance. When affined these seal takes the shop of an inviolable mark, this seal is the official signature of the company. It is to be fixed on only those documents as are provided in the articles.
   Everybody corporate having a perpetual succession must have a common seal .This requires a board resolution for affiliation under at least two signatures.
5. Quorum :
   Quorum is the minimum number of person required to enable a meeting go into session in order to serve the purpose of a meeting. It is desirable and necessary that it should be attended by a moderate number of its members to prevent misuse or abuse of powers. For this reasons a convention has grown up for minimum attendance in a meeting. The number of this minimum attendance, which is otherwise known as “Quorum” ,is laid down in this in the roles of quorum .According to company act -1994 in case of a private company 2 (Two) number and in case of any other company 5(Five) number personally present, shall be a quorum .
6. Proxy :
   Proxy may define as a person authorized to attend and vote at the meeting in the absence or on behalf of a member .To act and vote by a proxy. A statement in this regards is required to contain in the notice to be sent. Through a proxy is entitled to vote .He has no right to speak.
   Unless the articles otherwise provide, the following rules are applicable in case of appointment of proxy.

• A proxy not is appointed in the case of a company which has no share capital.
• A number of private companies can’t appoint more than one proxy in the meeting.
• Except on a poll, a proxy can’t vote.
  
  

1. Voluntary winding up:
   A voluntary winding up is different from compulsory winding up ,This mode of winding up is more common and advantageous in the present days ,when the members and the creditors settle the affairs of the business in their own accord without the intervention of the court ,It is called voluntary winding up.
   The voluntary winding up may be of two types:

• Members voluntary winding up
• Creditors voluntary winding up
  A voluntary winding up is said to be members voluntary winding up when a declaration of solvency is made by the directors in accordance with the provision of this act.
  When a resolution is passed at the general meeting to kind up a company voluntarily, without any declaration of financial solvency of the company. It is called creditors voluntary winding up.

1. Return on allotment :
   The return on allotment is a document which is required to file with the registrar within 60days of the allotment of share. Where a company having a share capital makes any allotment of its shares .It requires to title a return in which the following particulars shall be stated------

• The number and nominal amount of shares allotted
• The names ,Address and occupations of the allots
• The amount paid or due and payable on each share
• Except bonus shares of the shares are allotted as tully or partly paid up for consideration other then in cash ,the copies of the agreements duly stamped and verified in a prescribed manner.

1. Allotment of shares :    
   By issuing prospectus the company invites public to purchased share. Persons who are interested to take shares apply to the company and when the company accepts the said offer for the purchased of share is known as allotment of shares.An allotment is generally either more or less than the acceptance by the company of the offer to take shares .The allotment of share is an appropriation by the director of share to a particular person .He becomes the share holder of that company.
   General principles of allotment of shares are :

• An allotment must be made by proper authority.
• Allotment to be made in a reasonable time
• Allotment must be communicated to the applicant.
• Allotment must be absolute and unconditional

1. Authorized Capital :
   Any amount with which the company is proposed to be registered and which is set out in the MOA is known as registered or nominal capital of the company .Again it is also named as the authorized capital since ,the company is authorized to raise only that amount mentioned in the MOA by issue of share.
2. Right Share :
   Right share are those shares, which are issued after the original issue of shares but having an inherent right of the existing share holder to subscribe to those shares in proportion of their holdings. These shares can however be issued to the non-member when the existing share holders do not accept the offer within a prescribed time limit. The issue of right share must be within the limit of authorized capital of the company .Right share are to be made as per SEC guidelines and listing regulation. Generally right shares are issued to the existing shareholder at a concessive rate.