Maharashtra HSC Secretarial Practice key terms

The total money a company raises by issuing shares to investors. It is recorded in the company's balance sheet and divided into authorised, issued, subscribed and paid-up categories.

The maximum amount of share capital a company is permitted to issue, as stated in its Memorandum of Association. Increasing it requires alteration of the memorandum and shareholder approval.

The portion of issued capital that shareholders have actually paid to the company. It equals issued capital minus calls in arrears, and it determines real funds available for business use.

The mix of debt and equity a company uses to finance its assets and operations. A balanced structure keeps the cost of capital low while limiting financial risk.

Using borrowed funds or preference capital to increase the return available to ordinary shareholders. It magnifies profits when earnings exceed the fixed cost of the borrowed money but magnifies losses otherwise.

The extent to which a company's capital comes from fixed-cost sources such as debt and preference shares. Higher leverage raises potential returns to equity holders and also raises financial risk.

The funds a business needs for its day-to-day operations, such as buying raw materials, paying wages and holding stock. It is usually calculated as current assets minus current liabilities.

Ordinary shares that carry voting rights and a residual claim on profits and assets. Dividends depend on the board's recommendation and are paid only after preference shareholders are satisfied.

Shares that give holders a fixed rate of dividend before equity shareholders are paid, and priority in repayment on winding up. They usually carry no voting rights on ordinary resolutions.

Preference shares on which any unpaid dividend accumulates as arrears and must be settled before equity shareholders receive anything. This protects holders when profits are insufficient in a given year.

A written acknowledgement of debt issued by a company, usually secured by a charge on its assets and carrying a fixed rate of interest. Debenture holders are creditors, not owners.

A reserve created out of profits by companies issuing debentures, intended to ensure funds are available when the debentures mature. Rules on its creation and minimum balance come from company law and SEBI regulations.

An offer of securities to the general public for subscription, usually through a prospectus. It is the main route for a company raising capital from a large number of investors.

A formal document inviting the public to subscribe for a company's securities. It must disclose material facts about the issuer, the offer, risks and management so investors can make an informed decision.

A prospectus that does not state the exact price or the number of securities being offered. It is filed before the price is finalised, and the final prospectus records those details.

A price discovery process in which investors bid for shares within a price band and the final issue price is set from the demand recorded. It is commonly used for large public offers.

The first sale of shares by a company to the public, converting it into a listed entity. The proceeds usually fund expansion, debt repayment or working capital.

The formal acceptance by a company of an application for shares, creating a binding contract between the applicant and the company. It must follow the terms of the offer and applicable legal procedure.

Money paid by an applicant along with the application for shares. It is held pending allotment and must be refunded with interest if shares are not allotted within the prescribed time.

Amounts due from shareholders on allotted shares that remain unpaid after the due date. These reduce the company's paid-up capital and may attract interest and forfeiture provisions.

An institution that holds securities in electronic form on behalf of investors, similar to a bank holding money. In India, depositories are registered with and regulated by SEBI.

A registered intermediary, often a broker or bank, that acts as the investor's link to a depository. It opens demat accounts, records transfers and handles instructions from clients.

An account in which an investor's shares and other securities are held electronically instead of as physical certificates. It enables quick, paperless transfer and reduces risk of loss or forgery.

The process of converting physical share certificates into electronic form held in a demat account. It removes risks such as torn, lost or forged certificates and speeds up settlement.

The reverse of dematerialisation, converting electronically held securities back into physical certificates. An investor applies through the depository participant, which issues the certificates after cancellation of the electronic holding.

A portion of a company's profits distributed to shareholders, usually as a fixed amount per share. It is declared by shareholders on the board's recommendation and paid only from available profits.

A dividend declared by the board of directors between two annual general meetings, based on available profits. It must be confirmed at the next general meeting and paid within the prescribed period.

A separate bank account into which a company must transfer dividends not claimed by shareholders within the prescribed period. Unclaimed amounts are later transferred to the Investor Education and Protection Fund.

A statutory fund into which unclaimed dividends, matured deposits and certain other amounts are transferred. It finances investor awareness and protection activities.

The fixed periodic payment a company makes to debenture holders as a return on their loan. It is a charge against profits and must be paid whether or not the company earns a profit.

An organised market where listed securities are bought and sold under regulated rules. It provides liquidity, price discovery and a mechanism for settling trades.

The segment of the capital market where new securities are issued and sold for the first time. Funds raised go directly to the issuing company.

The market where existing securities are traded among investors after the initial issue. Proceeds go to the selling investor, not to the company.

The admission of a company's securities to trading on a recognised stock exchange. It requires compliance with listing obligations, including periodic disclosures to investors and the exchange.

A yearly meeting of shareholders required by company law at which accounts are adopted, directors are appointed and auditors are confirmed. It is the main forum for shareholder accountability.

A formal written communication to members announcing the date, time, place and business of a company meeting. It must be given within the prescribed period and include the required information.

The minimum number of members who must be present at a meeting for business to be validly transacted. If it is not met, the meeting cannot proceed and may be adjourned.

A person appointed by a member to attend and vote at a meeting on their behalf. The appointment must be in writing and lodged with the company within the prescribed time before the meeting.

A qualified professional responsible for ensuring a company complies with corporate law and governance requirements. The role includes maintaining statutory records, organising meetings and advising the board.

A company's obligation to contribute to society and the environment beyond its legal and profit-making duties. In India, qualifying companies must spend a prescribed share of profits on specified activities.

The principles of honesty, fairness and responsibility that guide how a company and its people conduct business. Ethical conduct builds trust with investors, employees and regulators.

The system of rules, practices and processes by which a company is directed and controlled. It covers board accountability, transparency, disclosure and protection of shareholder interests.

The elected group that manages a company's affairs and makes key decisions on strategy, dividends and appointments. Directors owe duties of care and good faith to the company.