Tag: sources of business finance - 2
Questions Related to sources of business finance - 2
In dematerialization of shares ______ passes the physical shares to company for making it into electronic form.
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shareholder
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depository participant
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bank
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none of the above
In dematerialization of shares depository participant passes the physical shares to company for making it into electronic form. Depository participant refers to the agent between depository and investors.
Rematerialization of shares means __________.
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getting the share certificates in bank account
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converting them into money by selling the shares
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getting the share certificate in the physical form
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none of the above
Rematerialization of shares means getting the share certificate in physical form. It also refers to the process of converting the shares in physical form which are held into electronic form.
Shares in the company are _________________.
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restricted
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freely transferable
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partially transferable
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none of the above
Shares in a public company are freely transferable. However, the shares issued by a private company are more restrictive towards transferability of shares.
A company funded through shares ___________.
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has unlimited liability
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exists only in contemplation of law
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has a perpetual succession
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comes to an end on the death of all the members
A company funded through shares has a perpetual succession. Perpetual succession refers to the law of continuing the organization despite the death, insanity, exit of one member, etc.
________ is the process by which electronic shares of an investor are converted to physical certificates.
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Rematerialization
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Dematerialization
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Materialization
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None of above
Rematerialization connotes the act of converting the shares held in electronic mode, in the investor's account, into shares in physical form. It is a similar process like De-materialization of shares in which the physical shares are converted into electronic mode.
______ is the process by which physical certificates an investor are converted to an equivalent number of securities in electronic format and credited in the investor's account with a Depository held through a Depository Participant(DP).
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Rematerialization
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Dematerialization
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Materialization
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None of above
Dematerialization is
the process by which physical certificates an investor are converted to
an equivalent number of securities in electronic format and credited in
the investor's account with a Depository held through a Depository
Participant(DP). In simple words, dematerialization refers to the conversion of physical form of share to electronic form.
The issuer company cannot make allotment of shares unless ______________.
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There is over subscription
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The minimum subscription has been subscribed
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Promoter has subscribed
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All of the above
Minimum Subscription: It is said to be the minimum amount which as per the directors must be raised by issuing shares to overcome various expenses like working capital required, preliminary expenses, repayment of money borrowed or any other payment etc. Company has to make sure that it must receive share applications for minimum subscription as mentioned in the prospectus, before it applies for the certificate pf commencement of business. Company has to refund back all the money received from the applicants and cannot make any allotment, if the amount of capital subscribed by the public is less than the minimum subscription or if the company could not get minimum subscription within 120 days of the issue of prospectus.
Public companies issued shares to public through document called ________________.
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Letter of offers & acceptance
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Offer for sale & acceptance
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Prospectus
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None of above
A Prospectus is a formal legal document that is required by and filed with the Securities and Exchange Commission (SEC) that provides details about an investment offering for sale to the public.
The premium on issue of shares must be treated as __________.
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Revenue Receipt
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Deferred Revenue Receipt
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Capital Receipt
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Capital Loss
The minimum subscription is the ______of the issued amount.
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50%
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80%
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75%
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90%