Shares Share is a unit issued by a company at the time of raising fund from the market.

It is a certificate issued to a person who applies for it and is given at a value predetermined by the company. Shares can be of different types and are issued by the company in accordance with the laws of the country in which they are issued. These shares are free to be traded on the stock exchanges and can be bought or sold through them. A person holding the shares of a company has the privilege of voting in the annual meetings as the part owner of the company. Annual dividend is also received by the holder, the amount as decided by the board of the company. Market price of the share is governed by the demand and supply situation, it means when there are few sellers and more buyers the price of the share goes up and vice versa. Investment in shares is a risky thing as its price is not constant and can go below its face value when the stock market crashes incurring losses to the investor. Stocks Stocks in the reference of stock market are the total number of shares a person has in one company or in many companies. Stocks and shares are commonly used terms for the instruments issued by a company for raising funds. Stocks of a company can be defined as total units of share that makes a person part owner in that company. A stock can be of two types namely common stock or preferred stock. The preferred stock does not entitle voting rights to its holder, but it entitles voting rights to the common stock holder. The preferred stock holder receives dividend before it is given to the common stock holder. The dividend value is usually higher in the case of preferred stock holders. These stocks investment are always subjected to risks and investments should be done under the guidance of an expert. The stocks and shares are distinguished with the help of following points: 1. A share is one of a number of individual units into which the capital of a company is divided. Stock is the capital in the form of a fund which may be divided into any desired amount. 2. Shares may be partly or fully paid-up, but stock must be fully paid. 3. Shares can be issued directly but stock cannot 4. Shares has a nominal value, whereas stock has none. 5. Shares must bear distinct numbers, while stock is never numbered. 6. Shares are of equal denomination while stock may be split into unequal amounts. 7. Shares cannot be transferred in fractional amount; stock can be transferred in any fraction although the articles may provide the minimum fractional amount of stock which can be transferred. Classes of share 1.Equity shares means that part of the share capital of the company which are not preference shares. 2.Preference Shares means shares which fulfill the following 2 conditions. Therefore, a share which is does not fulfill both these conditions is an equity share. a. It carries Preferential rights in respect of Dividend at fixed amount or at fixed rate i.e. dividend payable is payable on fixed figure or percent and this dividend must paid before the holders of the equity shares can be paid dividend. b. It also carries preferential right in regard to payment of capital on winding up or otherwise. It means the amount paid on preference share must be paid back to preference shareholders before anything in paid to the equity shareholders. In other words, preference share capital has priority both in repayment of dividend as well as capital. 3.Deferred or founders shares; the shares are normally held by the promoters of a company, hence it is also called founders share. These type of shares are issued by a pure pvt company, usually of smaller denomination. However generally they are given equal voting rights with equity shares which may be of higher denomination. Articles usually provide for payment of dividend, after declosing dividends on preference and equity shares. Definition of 'Forfeited Share' A share in a company that the owner loses (forfeits) by failing to meet the purchase requirements. Requirements may include paying any allotment or call money owed, or avoiding selling or transferring shares during a restricted period. When a share is forfeited, the shareholder no longer owes any remaining balance, surrenders any potential capital gain on the shares and the shares become the property of the issuing company. The issuing company can re-issue forfeited shares

at par, a premium or a discount as determined by the board of directors. Investopedia explains 'Forfeited Share' In certain cases, companies allow executives and employees to receive a portion of their cash compensation to purchase shares in the company at a discount. This is commonly referred to as an employee stock purchase plan. Typically, there will be restrictions on the purchase (i.e. stock cannot be sold or transferred within a set period of time after the initial purchase). If an employee remains with the company and meets the qualifications, he or she becomes fully vested in those shares on the stated date. If the employee leaves the company and/or violates the terms of the initial purchase he or she will most likely forfeit those shares. A debenture is a document that either creates a debt or acknowledges it, and it is a debt without collateral. In corporate finance, the term is used for a medium- to long-term debt instrument used by large companies to borrow money. In some countries the term is used interchangeably withbond, loan stock or note. A debenture is thus like a certificate of loan or a loan bond evidencing the fact that the company is liable to pay a specified amount with interest and although the money raised by the debentures becomes a part of the company's capital structure, it does not become share capital.[1] Senior debentures get paid before subordinate debentures, and there are varying rates of risk and payoff for these categories. Debentures are generally freely transferable by the debenture holder. Debenture holders have no rights to vote in the company's general meetings ofshareholders, but they may have separate meetings or votes e.g. on changes to the rights attached to the debentures. The interest paid to them is a charge against profit in the company's financial statements. Types of debentures Debenture can be classified as under : 1. From security point of view ; (i) Secured or Mortgage debentures : These are the debentures that are secured by a charge on the assets of the company. These are also called mortgage debentures. The holders of secured debentures have the right to recover their principal amount with the unpaid amount of interest on such debentures out of the assets mortgaged by the company. In India, debentures must be secured. Secured debentures can be of two types : (a) First mortgage debentures : The holders of such debentures have a first claim on the assets charged. (b) Second mortgage debentures : The holders of such debentures have a second claim on the assets charged. (ii) Unsecured debentures : Debentures which do not carry any security with regard to the principal amount or unpaid interest are called unsecured debentures. These are called simple debentures. 2. On the basis of redemption (i) Redeemable debentures : These are the debentures which are issued for a fixed period. The principal amount of such debentures is paid off to the debenture holders on the expiry of such period. These can be redeemed by annual drawings or by purchasing from the open market. (ii) Non-redeemable debentures : These are the debentures which are not redeemed in the life time of the company. Such debentures are paid back only when the company goes into liquidation. On the basis of Records (i) Registered debentures : These are the debentures that are registered with the company. The amount of such debentures is payable only to those debenture holders whose name appears in the register of the company. (ii) Bearer debentures : These are the debentures which are not recorded in a register of the company. Such debentures are transferrable merely by delivery. Holder of these debentures is entitled to get the interest. 4. On the basis of convertibility (i) Convertible debentures : These are the debentures that can be converted into shares of the company on the expiry of predecided period. The term and conditions of conversion are generally announced at the time of issue of debentures. (ii) Non-convertible debentures : The debenture holders of such debentures cannot convert their debentures into shares of the company. 5. On the basis of priority (i) First debentures : These debentures are redeemed before other debentures. (ii) Second debentures : These debentures are redeemed .

Transfer of Shares; Transmission of Shares (1) Transfer of Shares: Meaning: Transfer means transferring the shares on the name of some other person on a voluntary basis. Initiative: The transfer-or and transferee takes initiative. Nature of Action:It is a deliberate action taken by a share holder. Parties: There are two parties i.e. transfer-or and transferee to the transfer of shares. Documents Required: An instrument of transfer has to be duly executed by the transfer-or and transferee. Stamp Duty: It is payable on the market value of shares. Right of Refuse: The directors of the company can refuse transfer of shares on certain grounds. Consideration: There must be an adequate consideration for the transfer of shares, unless they are transferred by way of gift. 2) Transmission of Shares: Meaning: Transmission of shares means the passing of property or title in shares by the operation of law from a member to his legal representative on the happening of a certain event like death, insolvency or lunacy. Initiative: The legal heir of the deceased share holder takes the initiative. Nature of Action: It is not deliberate action of a shareholder, but the result of operation of law, after he dies or becomes insane or bankrupt. Parties: The legal heir of the deceased share holder is involved. Documents Required: Certain documents like court order of insolvency, death certificate are required for transmission of shares. Stamp Duty: No stamp duty is payable for transmission of shares. Right of Refuse: Transmission of shares can't be refused, it is under operation of law. Consideration: The question of consideration does not arise in the case of transmission of shares, as it is due to the operation of law. What Is Transmission Of Shares? Transmission of Shares:- Transfer of shares by the operation of law is known as Transmission of Shares.Transmission of shares takes place in case of death, insolvency or insanity of members of the company. Incase of transmission of shares, there is no need to fill the Transfer Deed. On the happening of the any of the above events i.e. death, insolvency or insanity, the shares are transferred to the legal representatives of shareholders. The legal representatives may also differ depending on the existence of Will of the deceased partner. If the deceased shareholder has left behind any Will, then the shares will be transferred to the person mentioned in it. In the absence of such Will, the transfer of shares will be made in favor of legal heir of the deceased member. Official Receiver or Official Assignee becomes the legal representative of insolvent member. Incase of Insanity of shareholder, his guardian becomes the legal representative. As legal representative is entitled to become the member of the company, he files an application to the company for thetransmission of shares on his name. He may also choose to sell the shares instead of becoming a member of the company. Difference b/w transfer and transmission of share . Transfer takes place by a voluntary act of the transferor while transmission is the result of the operation of law. 2. An instrument of transfer is required in case of a transfer but no instrument of transfer is required in case of transmission. 3. Transfer is similar to the normal process of transferring property, whereas transmission takes place on the death or insolvency of a shareholder.

Dividends: are payments made by a company to its shareholders. Typically, when a company is making a profit, it distributes those profits to its owners (the shareholders) by way of a dividend. When a company makes a profit, some of this money is typically reinvested in the business and called retained earnings, and some of it can be paid to its shareholders - as a dividend. Paying dividends reduces the amount of cash available to the business. Companies that pay dividends are usually least volatile and are typically large and established companies. Smaller, high growth companies usually do not pay dividends, as they need to reinvest that money into business to support the growth. Dividends are taxable as a regular income and at much higher rate than that applied to long term capital gain. As of 2003, cash dividends are taxed at a maximum rate of 15% as long as the stock has been held for at least 60 out of the 120 days beginning 60 days prior to the ex-dividend date. If you have held the stock for a period of less than this the dividend will be taxed at your regular income level. Distributions of a companys profit, paid out to common and preferred shareholders. Usually dividends are paid out on a quarterly basis in the form of a cash dividend, as determined by a companys board of directors. Statutory provisions regarding dividends Payment of dividend can be made only from profits; it should be noted that no dividend can be paid out of capital. No dividend can be paid if there is non compliance with sec.80 , the dividends cannot be declared by a company on its equity shares, if it fails to redeem the preference shares as required by sec.80a. Dividend payable only in cash only Dividend payable to the registered holder only of such shares or to his holder or to his banker Dividend to be paid within the prescribed time within 42 days of declaration Dividends to be declared only at AGM in respect of the particular FY for which the AGM has been convened No dividend on advance payment of cell Declared dividend is a statutory debt from the date on which it is declared and become payable. The SH entitled to it can seek the intervention of court for payment. Adjustment of dep and lossed for previous year; the co cannot pay dividends, if dep are not provided for the current year out of the profits at the rates specified in schedule of the co has incurred any loss in any previous FY, such losses should also be deducted for profits.

Parties to negotiable instrument and their liability Parties ;1. Maker: A person who makes a promissory note i,e, who signs an instrument which contains an unconditional under taking by him to pay a Certain sum of money is known as the maker of a promissory note. 2. Drawer: the maker of a bill or cheque is called the drawer 3. Drawee: In a bill of exchange or cheque the person who has been directed to pay the amount is known as the Drawer in the case of a cheque the drawer is always a bank. 4. Drawee: in case of need: when in the bill or in any endorsement there on the name of any person is given in addition to the drawer to be resorted is called a Drawer in the case of need 5. Acceptor: in a bill of exchange the drawer orders a certain drawer to pay a certain sum of money his assent on the b ill which he does generally by writing the word acceptor on the bill 6. Acceptor for honour: some times the drawer may not accept the bill I,e, he may dishonor the bill by non-acceptance, for various reasons. In such a situation the honour of the drawer and the indorsers is adversely affected. If some body want to save the honour of the drawer or any endorser of the bill and he, therefore, accepts such a bill of exchange, the person so accepting the bill of exchange is known as the acceptor for honour 7. Payee: the person in whose favor a negotiable instrument is drawn or made is known as the Payee 8. Indorser: when a person who is the holder of a negotiable instrument and wants to transfer his rights to another person and with that object in view puts his signatures on the instrument (generally at the back) or. On an attached sheet of paper, he is said to have indorsed the instrument and is called the indorser 9. Indorsee: indorsaee is a person in se who favour the indorsement is made.1.6,it means that person in whose favour the negotiable instrument has been transferred by an indorsement. 10. Holder: broadly speaking the holder means the owner of the negotiable 11. Holder in due course: he is such a holder who takes the negotiable instrument after satisfying the requirement of section9. It means that a person who takes the negotiable instrument as a holder, for consideration, in good faith and before maturity is a holder in due course.

Laws relating to Intellectual Property Rights (IPRs) Intellectual property(IP) is the creation of human intellect. It refers to the ideas, knowledge, invention, innovation, creativity, research etc, all being the product of human mind and is similar to any property, whether movable or immovable, wherein the proprietor or the owner may exclusively use his property at will and has the right to prevent others from using it, without his permission. The rights relating to intellectual property are known as 'Intellectual Property Rights'. Intellectual Property Rights, by providing exclusive rights to the inventor or creator, encourages more and more people to invest time, efforts and money in such innovations and creations. Intellectual property rights are customarily divided into two main areas:Copyright and rights related to copyright:- the rights of authors of literary and artistic works (such as books and other writings, musical compositions, paintings, sculpture, computer programs and films) are protected by copyright. Also, protection is granted to related or neighbouring rights like the rights of performers (e.g. actors, singers and musicians), producers of phonograms (sound recordings) and broadcasting organizations. Industrial property, which is divided into two main areas:One area can be characterized as the protection of distinctive signs, in particular trademarks (which distinguish the goods or services of one undertaking from those of other undertakings) and geographical indications (which identify a good as originating in a place where a given characteristic of the good is essentially attributable to its geographical origin). Other types of industrial property are protected primarily to stimulate innovation, design and the creation of technology. This category includes inventions (protected by patents), industrial designs and trade secrets. The issue of Intellectual Property Rights was brought on an international platform of negotiation by World Trade Organization (WTO) through its Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). This agreement narrowed down the differences existing in the extent of protection and enforcement of the Intellectual Property rights (IPRs) around the world by bringing them under a common minimum internationally agreed trade standards. The member countries are required to abide by these standards within stipulated time-frame. India, being a signatory of TRIPS has evolved an elaborate administrative and legislative framework for protection of its intellectual property.

Endorsement signature on the back of a negotiable instrument, such as a check . Endorsement legally transfers ownership to another party. The Uniform Commercial Code (UCC) recognizes five kinds of endorsement: (1) blank endorsement or unqualified endorsement; (2) special endorsement; for example, "Pay to the order of ABC Company"; (3) restrictive endorsement, writing limiting further negotiation, such as "for deposit only"; (4) qualified endorsement, "Pay to ABC Bank, without recourse"; and (5) conditional endorsement, "Pay XYZ Company upon completion of contract." (Rarely used.) The Expedited Funds Availability Act of 1987 imposes certain restrictions on check endorsements, requiring endorsers to write their names in the top 1 1/2 inches on the back of a check, leaving space for bank endorsements. 1. Blank endorsement: Simplest endorsement, consisting of only the holder's signature. It generally converts "order" paper to "bearer" form. A paper containing a blank endorsement is one that has the signature of the payee but no specific endorsee is designated. A check that is made payable to the order of X is endorsed in the blank when X signs it. Once endorsed, it becomes bearer paper and is negotiable by anyone who physically holds it. A blank endorsement is changed into a special endorsement if certain words are written above the endorsee's signature, such as "pay to the order of Y." ... 2. Restrictive endorsement: In addition to holder's signature, includes a restriction on how the paper may be used by transferee. Most common wording is "For Deposit Only." The transferee bank must apply the check to the holder's deposit account. When an endorsement restricts the negotiability or transferability of proprietorship of a cheque, it is known as restrictive endorsement. 3. Special endorsement: This endorsement names the next holder and requires his/her/its endorsement for further negotiation. Usual wording is "Pay to [the order of] TRANSFEREE NAME." 4. Partial endorsement: A partial endorsement is one which means to transfer the cheque only for a part of its value. For instance a cheque for Rs. 500 may be endorsed only for Rs.300. Legally such an endorsement is invalid. 5. conditional endorsement; the endorser can make the indosement in such a way that the right of the indorsee to receive the amount due there on is made dependent upon the happening of a specified event, although such an event may never happen the indorse is permitted to make the right of the indorsee to receive the payment contingent on the fulfillment of some condition.