Summary Companies part 2

ACCOUNTING TERMINOLOGY CONTINUED
Companies (pg. 25-60)

, FINANCIAL STATEMENTS:
 Shares usually sold it lots of 100.
 Share certificate ➔ legal evidence of the shareholding by a shareholder ➔ kind
of shares he/she holds (ordinary or preference), number of share and serial
number of shares.
 Company must keep record of each shareholder in share register, in which all
changes in shareholdings must be recorded,
 Company ➔ legal personality ➔ shareholder dispose of shares without
affecting the continued existence of the company ➔ company does not benefit
financially in terms of capital when shares are sold.
 Share certificate is a negotiable instrument ➔ may be passed on to another
person in the event of the sale of he shares.
 JSE provides the means for facilitating transactions between shareholders
 Share price quoted on JSE (market price) very seldom bears any resemblance to
issue price of shares.
 If company decides to issue additional shares, not restricted to selling ‘new
’shares at initial share price, market price gives indication of what public i
prepared to pay, so company may make an issue of shares at a higher price.