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Q6. Stocks and Shares MCQ Question with Answer Stocks and Shares MCQ with detailed explanation for interview, entrance and competitive exams. 4,800 Amount to be transferred to Capital Reserve A/c= 9,600(12 x 800) – 4,800(Amount of share forfeiture)= Rs. Which among the following is type of share issued to existing shareholders to increase its subscribed share capital? Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 7 Issue of Shares. MCQ ON ISSUE OF SHARES, Share application and allotment account is a, Only sweat equity shares can be issued at a Sweat equity compensates for the shortage of cash. Get all latest content delivered straight to your inbox. A sweat equity shares contract is a legal document signed by the shareholders that guarantee their equity rights. What is the lock-in period of Sweat Equity Shares? A company limited by shares may, if so authorised by its articles, issue preference shares which are liable to be redeemed within a period not exceeding twenty years from the date of their issue. Sweat equity share is issued to employees and directors in the way of discount or consideration other than cash by the companies whose equity shares are listed on a recognized stock exchange in accordance with section 79A of the Companies Act, 1956. Match the following with relevant sections: 6. March – 2020 Edition Disadvantage of Sweat Issue: As sweat equity shares are issued at concessional rates, the com­pany loses financially. However, for the purpose of section 54 of the 2013 Act and the related rules, Rule 8 of the Companies (Share capital and Debentures) Rules, 2014 defines “employee” so as to mean: Accountancy MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. Difference between Equity Shares and Preference Shares. 5%; 10%; 15%; 20%; Answer: (3) The Company shall not issue Sweat Equity Shares for more than 15% of existing paid-up share capital or issue value of shares Rs.5,00,00,000/- (Rupees Five Crores), whichever is higher. Dynamic Tutorials and Services is a Leading Coaching Centre of Tinsukia District. Q8. To pay the individuals who contributed the sweat equity, the share price or unit value of the company is multiplied by the monetary amount for the labor performed to get the sweat equity value for that person. 18. Answer: (1) Amount to be transferred to share forfeiture A/c= 7,200(800 x 9) – 2,400(800 x 3)= Rs. Match the following: Maximum number of members in: 5. ISSUE OF SWEAT EQUITY SHARES [Effective from 1st April, 2014] (1) Notwithstanding anything contained in section 53, a company may issue sweat equity shares of a class of shares already issued, if the following conditions are fulfilled, namely:— (a) the issue is authorised by a special resolution passed by the company; (b) the… Which of the following capital is not shown in company’s balance sheet? Answer: (2) Q7. The amount payable on application on every security shall not be less than five per cent. For example, Bob receives $100 dollars in sweat equity from ABC Corp. Bob is required to pay taxes on the value of sweat equity received ($100 dollars) as earned income. Q1. Permission from central government to issue share capital is required if Nominal capital exceeds Rs. May – 2020 Edition Objective Questions on Company Law with Answers: Question: A company to issue sweat equity shares must pass a. of the nominal amount of the security or such other percentage or amount, as may be specified by the Securities and Exchange Board by making regulations in this behalf. What are Sweat Equity Shares? Sweat equity literally refers to an individual’s contribution – typically not monetary – to an organisation. Kumar Nirmal Prasad on. As per Section 52 of the companies act, amount collected as premium on securities cannot be utilised for: 34. If the person who performed the sweat equity delivered work worth $30,000, the person should be paid 2,000 shares of stock. [Public] [Private] [Employee] [All of above] 8 people answered this MCQ question is the answer among Public,Private,Employee,All of above for the mcq Sweat equity shares are issued to The company can use the Capital Redemption Reserve to issue the fully paid-up bonus shares. Sweat equity is contribution to a project or enterprise in the form of effort and toil. Importance of Sweat Equity. Sweat equity shares cannot be transferred within 3 years from the date of their allotment. If a company violates the Section 33 of Companies Act related to Abridged Prospectus, then it shall be punishable with fine of _________? 15. A new company set up by existing companies with five year track record can issue share at premium provided: 35. The financial exposure to the company is more in cases of sweat equity. We have compiled NCERT MCQ Questions for Class 11 Business Studies Chapter 3 Private, Public and Global Enterprises with Answers Pdf free download. However, instead of going to the public, the company gives its existing shareholders the right to subscribe to newly issued shares in proportion to their existing holdings. vaibhav chauhan on. The Company shall not issue Sweat Equity Shares for more than _____ of existing paid-up share capital at one-time. August – 2020 Edition 9. Q3. Answer: (4) A rights issue is a way by which a listed company can raise additional capital. It’s a part ownership of the business and will stay forever unless the employee decided to sell his sweat equity share. The term employee has not been defined under the 2013 Act. July – 2020 Edition December – 2019 Edition. SH.3 and will forthwith enter the particulars of the Sweat Equity Shares issued under section 54. “Sweat Equity Shares” means such equity shares as are issued by the Company to its Directors or Employees at a discount or for consideration, other than cash, for providing their know-how or making available rights in the nature of intellectual property rights or value additions, Q4. Q2. Bonus shares are issued to the shareholders without any additional cost. The Register of the Sweat Equity Shares will be maintained at the registered office of the company or any such other place as the Board may decide Answer: (3) As per Companies Act 2013, what is maximum tenure of preference shares except for infrastructure projects? of the nominal amount of the security, Answer: (1) It does not involve floatation costs and brokerage. Securities premium account is shown on the liabilities side of the balance sheet under the head: 19. Q10. Explanation are given for understanding. The Sweat Equity Shares are non-transferable and are in lock-in period for a period of 3 years from the date of allotment. But sweat equity once paid can’t lapse. If the business is a limited company or partnership, the person who performed the equity in effects gets an ownership percentage in the company. As per Section 2(88) of the Companies Act, 2013, Sweat Equity Shares are the shares issued by the company to its Director or employee at a discount or for consideration other than cash, for providing know-how or making available like intellectual property rights or value addition.. Who are eligible for Sweat equity Shares? Sweat Equity Shares, Explanation: As per the Companies Act, 2013, A company cannot issue its shares at discount except sweat equity shares. Only sweat equity shares can be issued at a discount. ‘Sweat equity shares’ are such equity shares, which are issued by a Company to its directors or employees at a discount or for consideration, other than cash, for providing their know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called. Accountancy MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. MCQ OF ISSUE OF SHARES accountancy class12 by. Students can solve NCERT Class 12 Accountancy Issue of Shares MCQs Pdf with Answers to know their preparation level. In which of the following cases a company can use Capital Redemption Reserve? Sweat Equity Taxability. Sweat Equity Shares are issue to _____? The Company shall not issue Sweat Equity Shares for more than 15% of existing paid-up share capital or issue value of shares Rs.5,00,00,000/- (Rupees Five Crores), whichever is higher. For example, If you're paying the person who did the work 10,000 shares at $5 per share, but your par value is $1 per share, then the value of the sweat equity beyond the par value is $50,000 (10,000 shares x $5 per share) - $10,000 (10,000 shares x $1 per share) or $40,000. Q5. Equity share and Preference share are the two types of share that a company issues. 16. Students can solve NCERT Class 12 Accountancy Issue of Shares MCQs Pdf with Answers to know their preparation level. Sweat Equity in the form of shares. Dear aspirants, MCQ Questions for Class 11 Business Studies with Answers were prepared according to the latest question paper pattern. Which among the following is type of share issued to existing shareholders without receipt of any consideration from shareholders for issuance of such shares? 36. Sweat equity is a form of income. Q4. (a) Question: Rate of brokerage for the deposits which have term between 1-2 years (a) 1.5% (b) 2% (c) 1% (d) None of […] 5 crore; whichever is less. As the name suggests, Sweat equity share ----- Equity share which is exchanged for the sweat of the company's people. If you want a shareholder to hold shares then an existing shareholder can transfer some of his or her shares or new shares could be allotted. Disbursement of sweat equity: In a year, the sweat equity shares cannot account for more than 15% of the existing paid up equity share capital or shares having issue value of rupees 5 crores, whichever is higher. June – 2020 Edition QUESTION: 13. 8. The term Company and Body corporate denote the same thing. Financial Management MCQs (Multiple Choice Questions and Answers) Also Useful for NT…, 1. Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 7 Issue of Shares. The term ‘director’ has been defined under section 2(34) of the 2013 Act. The minimum amount payable on application on every security shall not be less than _____ per cent. Match the following: Minimum number of members in. Answer: (2) Calculate the value of the sweat equity beyond the par value of the stock. (a) Special resolution (b) Ordinary resolution (c) Unanimous resolution (d) None of these Ans. If a company violates the provisions of Section 33 of Companies Act 2013, it shall be punishable with a fine of fifty thousand rupees for each default. We are presenting you the Companies Act MCQ Part 4 for SEBI Grade A Companies Act Section of the exam. Rule 8 of Companies (Share Capital and Debenture) Rules, 2014 provides that a company shall not issue sweat equity shares for more than 15% of the existing paid-up equity share capital or shares of the value of 5 crores, whichever is higher and it cannot exceed 25% of the paid-up equity capital of … In this video we will learn about the meaning and provisions regarding issue of Sweat Equity Shares under Companies Act 2013. 7. Total value of sweat equity shares issued by a Company shall not exceed 25% … Q5. MCQ - Issue of Shares and Share Capital | Multiple Choice Questions and Answers | Company Accounts | Corprorate Accounts | CMA MCQ by. January – 2020 Edition Q9. Sweat Equity Shares issued at a discount must belong to a class of shares already issued. b. This contains 20 Multiple Choice Questions for Commerce Test: Company Accounts Issue Of Shares - 2 (mcq) to study with solutions a complete question bank. ... 2013, A company cannot issue its shares at discount except sweat equity shares. A company may issue sweat equity shares to directors or employees. A company may issue preference shares for a period exceeding twenty years for infrastructure projects. April – 2020 Edition 13. Which among the following is type of share issued to employees of the company usually at discounted price? When they are mostly offered? February – 2020 Edition About Kumar Nirmal Prasad Kumar Nirmal Prasad is the founder and CEO of Dynamic tutorials and Services. Sweat Equity Shares (B) Private Equity Shares (D) Bonus Equity Shares (iv) Issue and Allotment of Shares. Issue of Sweat Equity Shares According to section 2(88), sweat equity shares mean such equity shares issued by a company to its directors or employees at a discount or for consideration, other than cash for providing their know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called. A company is said to be Deemed Public Company as per Companies Act, 2013: Deemed Company would mean a company which is subsidiary of a public company. Body corporate does not include Co- operative society. Which of the following are the characteristics of a company? Which law defines Sweat Equity Shares? New shares dilute the interests of all shareholders. Answer: (2) Equity share is an ordinary share. The company will maintain a Register of the Sweat Equity Shares in Form No. An ESOP (Employee stock ownership plan) refers to an employee benefit plan which offers employees an ownership interest in the organization. The company shall not issue sweat equity shares for more than fifteen percent of the existing paid up equity share capital in a year or shares of the issue value of rupees five crores, whichever is higher. Thus, sweat equity shares denote stocks that companies issue to reward such contributions. SECTION 54. Bonus shares are the additional shares that a company gives to its existing shareholders on the basis of shares owned by them. It refers to the shares issued at discount to the employees and directors and shares issued for consideration other that cash for providing intellectual property rights, know how , value additions to the company or similar contributions. We provide complete coaching for Commerece and Arts stream from Class 12 to Master Degree level. Which of the following statement is false? 1 crore. Issue of share at a discount must be authorised by a resolution passed by the company in general meeting and duly sanctioned by the central government. Nothing contained in these regulations can be applied to any unlisted company. Sweat equity shares; Organisations often compensate employees or directors on a job well done by issuing sweat equity shares. Share application and allotment account is a: 17. Answer: (4) 2. 14. Moreover, a Sweat Equity Share Contract is necessary to prevent conflicts, especially for businesses with many partners. The equity stockholders get the opportunity to cast their vote in major business decisions. For example, if a corporation's share price is $10 and a person performed work worth $100,000, that person did work worth 10,000 shares. It does not matter if such companies are private by its articles. The Company shall not issue Sweat Equity Shares for more than _____ of existing paid-up share capital at one-time. 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