Organization Structure of SEBI

SEBI has a hierarchical structure that is divided into numerous departments, each of which is led by a department head. The following are some of SEBI’s departments:

• Debt and Hybrid Securities
•  Corporate Finance
•  Economic and Policy Analysis
• Human resources
• Investment Management
• Market for Commodity Derivatives
• International Affairs
•  National Securities Market Institute

Board of Directors

• SEBI’s senior management is made up of a Board of Directors who are selected by several government agencies.
• The Union government of India nominates the Chairman of Securities and Exchange Board of India.
• Two officers from the Ministry of Finance of the Union.
• A member will be appointed from the RBI (Reserve Bank of India).
• Another five members will be appointed by the Union government.

The functions of SEBI as per the Act include:

• To promote and regulate orderly development of capital markets, to protect investors in securities and to provide services and facilities for such protection.
• To ensure fair dealing in securities and to prevent fraudulent activities and insider trading.
• To develop efficient, reliable and transparent stock exchange mechanism for clearance and settlement of securities transactions.
• To promote and to regulate the market for derivative products like, securities futures contracts, options and swaps including collective investment schemes such as mutual funds, depositories etc.
• To develop self-regulatory organizations in order to check fraudulent activities in securities markets.

SEBI has wide range of power and responsibilities:

1. Enforcement:

SEBI has wide power and authority to enforce the provisions of the Securities Contracts Act, 1956, the Depositories Act, 1996, BIFR (Bankruptcy laws) and also various directions issued by the central government.

2.Appointment of officers/employees:

It can appoint its own officers or employees as well as co-opt any officer of the Government as its officers.

3. Investigation:

It can conduct investigation under the provisions of the Act or make incidents inquiry itself.

4. Subordination to it by other Authorities, etc.:

Any person, authority or authorities establishing any schemes or regulating or controlling any markets may place themselves in subordination to SEBI.

5. Financial Assistance:

The Board can provide financial assistance to SEBI sub- Committees for investigations, etc.

Powers of SEBI

1. Power of search and seizure:

Under Section 10 SEBI is empowered to search any premises or place where it believes that any books of accounts, documents, vouchers, computer disc or storage devices used in connection with securities market is kept and seize them if necessary. Section 11 of the Act gives it power to issue search warrants for any place or premises occupied by a person reasonably suspected of having committed an offence punishable under the Act, etc.

2. Power of arrest is another power of SEBI :

Under Section 12 any officer of SEBI or any other police officer not lower in rank than that of an Assistant Superintendent of Police, may arrest without warrant any person who has committed an offence punishable under the Act.

3. Power for service or attachment:

Under section 14 SEBI or any officer authorized by it in this behalf can serve a copy of order made by it on the concerned person through its officers and also attach their property pending disposal of any proceedings under the Act.

4. Appointment of officials, etc.:

In terms of Section 19, SEBI may appoint its officers, employees and others as deemed necessary for the discharge of functions under the Act. It can also co-opt any officer of Government or Law enforcement agency as an officer of SEBI.

5. Power to make regulations:

The Board may, with the previous approval of Central Government, by notification in Official Gazette, make rules consistent with the Act for carrying out the purposes of the Act. These rules are called ‘Securities and Exchange Board of India (Futures Trading) Regulations, 2004’.

6. Granting sanctions is a power of SEBI :

Under Section 21 SEBI may grant sanction to commence any proceedings before Appellate Tribunal or it even by itself -for sanctioning prosecution under the Act. It keeps a comprehensive record of all proceedings before it.

7. Recovery of dues:

Under Section 28 the Board has been given the power to recover from any person any sum which he is liable to pay under this Act and any other sum payable by him under this Act or rules made thereunder. The Board may file a suit for recovery in a Civil Court. The Civil Court will not have Jurisdiction to entertain any suit instituted for recovery of money due to SEBI, without the previous sanction of SEBI.

8. Power of Central Government:

Under Section 30(1) the Board has been given powers and functions as are exercisable by a civil court under the Code of Civil Procedure, 1908 (5 of 1908) in respect of the following matters, namely:

(a) Summoning and enforcing the attendance of any person

(b) requiring discovery and production of any document;

(c) receiving evidence on affidavits;

Section 30 (2-A) provides for attachment proceedings under the Code. Under Section 30 (3) the Board has been empowered to issue a search warrant and if it considers it necessary so, for compelling the attendance of any person.

What are SEBI’s Mutual Fund Regulations?

SEBI’s Mutual Funds Regulations are as follows:

• Any group company that includes a fund’s asset management company cannot own 10% or more of the asset management company’s equity and voting rights.
• This asset management firm is not allowed to sit on the board of any other mutual fund.
• All indexes, with the exception of the index for a sectoral or thematic index, have a stock cap of 25%. For certain indexes, the cap cannot be higher than 35%.
• The top three index constituents cannot have a combined weight of more than 65 percent.
• Before being launched, new funds must declare the status of their compliance to the SEBI.
• Exit penalties must be paid by liquid scheme investors who leave the scheme within seven days.

Conclusion

SEBI (Securities and Exchange Board of India) is the body in charge of ensuring that our country’s share market runs smoothly. It is also SEBI’s responsibility to ensure that investors’ hard-earned money is not wasted when they invest in the stock market. Aside from that, SEBI’s powers must be approved by the Securities Appellate Tribunal and the Supreme Court of India.

related posts

NFRA – National Financial Reporting Authority

NBFC Regulation

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What is Financial markets?

A financial market is a general term that refers to many marketplaces where financial assets are bought and sold. Examples of these marketplaces include bonds, money, derivatives, and stock markets. The financial markets, broadly speaking, comprise a number of smaller marketplaces, including the stock market, bond market, forex market, commodities market, and derivatives market. As with any marketplace, some financial markets may be controlled while others may not, and the prices of the financial assets exchanged in financial markets also fluctuate based on a variety of reasons. These price changes offer opportunities for interested traders and investors to profit from their investments.

Regardless of their size of business or other criteria, it provides a framework where different parties, such investors and debtors, are handled equally and effectively. Additionally, the financial sector offers a variety of employment opportunities, which lowers the nation’s unemployment rate. Due to the fact that funds are provided when tangible properties are purchased and sold, the real estate market, like the rest of the financial markets, is a financial market.

Numerous applications for financial markets

• Price discovery: The financial market makes it easier to establish prices for the many financial securities that are traded. The underlying premise is the embodiment of the basic economic notion of demand and supply, which assists in understanding what the market is prepared to pay for a given financial instrument. Regardless of whether they are newly issued or already in existence, it is the platform where the prices of financial assets are fixed.
• Funds mobilization: The return that investors expect, which is determined by participants in the financial market, is another important factor for capital allocation. The needed rate is an important consideration when raising money, thus the businesses seeking funding must be aware of it. As a result, the financial market decides how to distribute the available funds from investors to the businesses or people who need money to meet their operational needs. The financial market assists in transferring money from investor savings to firm capital in this way.
• Liquidity: Without a regulated financial market, investors would be unable to transact and would be compelled to hold on to their financial assets or instruments until a liquidity event. The liquidity event for debt instruments occurs when the issuer is legally required to make payment at maturity. For equity instruments, the liquidity event will occur at the moment of the company’s voluntary or involuntary liquidation. The financial market steps in at this moment by offering investors trading opportunities so they can quickly buy and sell financial products at any time for their fair market value. As a result, the financial market offers investors liquidity, enabling them to freely liquidate their holdings and turn their securities into cash.
• Risk sharing: Those who make the investments differ from those who lend their money as investors. The financial market makes sure that investors are completely aware of the dangers connected with the investment before making one through the risk-sharing function. This is how the financial market aids in shifting investment risk from the person making the investments to the investors who are making them.
• Intermediary: Industries need money to extend their operations, and investors are needed for this. On the other hand, investors need a good return on their investments, which is why they depend on the industries. As a result, for both industries and investors to succeed, the other is necessary. As a result, the financial market serves as an intermediary and offers the ideal platform so that businesses can quickly raise the money they require while investors can discover the investment opportunities they are looking for in order to earn a profit.
• Market efficiency: Before investing their money in the purchase and sale of any financial products, investors look for various sorts of information. This information can only be acquired in the absence of the financial market by investing a sizable sum of time and money. The financial market, however, makes sure that investors can access all of these facts without having to spend a sizable sum of money. It aids in lowering transaction costs in this way.
• Capital formation: With the aid of the financial market, savings that might otherwise go unused are transformed into capital for firms. In other words, it acts as a conduit for investors’ savings to reach firms, which aids in the production of capital.
• Cost determination: By letting market forces work on their own to establish the pricing of a tradable asset, financial markets help evaluate the capital worth of securities.
• Platform: Financial markets provide as a place where prospective buyers and sellers may connect, communicate, agree, and transact. The financial market’s characteristic that makes trading simpler also saves interested parties a great deal of time and money.
• Mobilization of Savings: In another equation, financial markets are components of the world economy that bring money back into circulation by enabling it to be employed for the purchase and sale of securities.
• Time Factor: Being honest, operating in a conventional market where individuals trade requires a lot of time and work. On the other hand, a financial market provides all the data required for trading financial assets. The procedure requires little money, time, or effort to deliver profitable outcomes.

Implication

It’s clear why financial markets are crucial to the global economy given their wide-ranging economic effects. As was already mentioned, when it comes to trading, the financial market does not distinguish between the size of an individual or a corporation entity. Because of this, a financial market plays a crucial role in creating solid business opportunities for everyone as well as expanding the notion of inclusivity in terms of economic integration. The largest legal Services Portal in India, Legalraasta, offers on-demand access to lawyers for any type of financial market assistance about any case or issue. It links those looking for legal counsel with competent lawyers who may assist them in solving their issues swiftly and simply. It aids people in navigating challenging legal issues so they can resume life as quickly as possible.

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The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) is a government-backed life insurance scheme in India. The announcement was made in the 2015 budget. The one-year life insurance plan is renewable from year to year and provides coverage in the event of a sudden death. For a nominal annual premium of Rs.330, it provides a cover of Rs.2 lakh in the event of a policyholder’s sudden death. There is no investing component to this plan; it is solely an insurance plan. The scheme is offered by the Life Insurance Corporation of India (LIC) and other insurance companies willing to collaborate with banks to sell the product on comparable terms.

Who was eligible for PMJJBY?

• The scheme is open to everyone between the ages of 18 and 50 who has a savings bank account.
• Even if the individual has many bank accounts, he can only join the plan with one of them.
• In the case of joint accounts, the scheme is open to all account holders.
• It is necessary to link your Aadhar card to your savings account.

Pradhan Mantri Jeevan Jyoti Bima Yojana’s key features (PMJJBY)

The scheme’s salient elements are as follows:

• The program is for a year. The coverage period begins on June 1st and ends on May 31st of the following year.
• The premium for the scheme is due via auto debit from the insured member’s bank account.
• The insured member must consent to the premium being deducted from his bank account by auto debit. The premium will be deducted and the member will be covered only if the permission is granted. To have a complete year of coverage, the approval must be obtained by June 1st.
• Death coverage begins after the first 45 days of the plan’s inception. This means that no claim will be paid if the insured dies within the first 45 days of joining the scheme. In the case of accidental deaths, however, the 45-day waiting period does not apply.
• The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) premiums are not subject to GST

Coverage and premium details of the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) scheme

• The plan covers death within the one-year coverage period. The money assured, which is INR 2 lakh per insured member, is paid in the event of death. Only one scheme can be used by a member, and only one bank account can be used. Even if the member has many bank accounts, the insurance policy will only cover one of them.
• The scheme has an annual premium of INR 330 per insured member.
• The premium is paid by debiting the insured member’s savings account. The premium is split into many parts, which are as follows:
• For giving insurance coverage, the insurance company receives INR 289 as a premium.
• The agency or bank that assists the individual in enrolling in the scheme is reimbursed for the costs of insuring the scheme’s members. The compensation amount is INR 30 per insured member each year.
• The bank is additionally reimbursed for the costs associated with managing the scheme. The compensation amount is INR 11 per insured member per year.

How can you apply for the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)?

Those interested in enrolling in the Pradhan Mantri Jeevan Jyoti Bima Yojana can contact the banks with which they have a savings account. Other life insurance firms, as well as LIC, provide coverage under the scheme. Under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), banks form partnerships with insurance companies to provide insurance coverage to their account holders

Although coverage begins on June 1st of each year, late enrollees can still pay the price and receive coverage. Coverage would begin on the date the premium was debited from the individual’s account, but the entire year’s premium would have to be paid. Enrollment is a simple process. On the government’s website, you may find the application form. The individual can fill out the form and submit it to the banking with whom he or she has an account, and the enrolment will be completed. The form is accessible in a variety of languages, and the individual can fill it out in whichever language he or she prefers.

Many banks now offer SMS or net banking options for enrolling in the service. To complete the enrolment process, the applicant must agree to the scheme’s terms and conditions as well as give his or her permission for the premium to be deducted automatically from his or her bank account. The candidate must accurately fill out the following information on the application form:

• The number on his or her Aadhar Card
• Number of his or her Savings Bank Account
• The applicant’s permanent address
• The applicant’s legal guardian’s address
• To receive updates regarding the coverage, provide your phone number and email address.

When will the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) scheme’s coverage expire?

In the following circumstances, coverage under the Pradhan Mantri Jeevan Jyoti Bima Yojana will be terminated:

• If the insured reaches the age of 55, coverage is no longer available since coverage is no longer available after this age.
• If the insured person cancels the bank account used to subscribe to the program, or if the insured person’s bank account has insufficient funds to pay the premium and the premium has not been auto debited by June 1st.
• If the insured person has used multiple bank accounts to apply for the scheme. When it is discovered that several applications have been submitted, the scheme’s coverage will be cancelled.

How is the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) claim settled?

The Pradhan Mantri Jeevan Jyoti Bima Yojana’s claim settlement procedure is straightforward. However, the nominee of the insured and the bank from which the scheme was purchased should take certain procedures. These are the actions to take:

The steps that the insured’s nominee should take are as follows:

• As the coverage only pays out in the event of death, the insured person should be sure to mention the nominee’s name. Once the insured dies during the term of coverage under the program, the nominee must begin the claim process.
• The nominee should contact the insured’s bank, which is where the insured signed up for the Pradhan Mantri Jeevan Jyoti Bima Yojana.
• For claim settlement, the nominee must have the insured’s death certificate on hand.
• The claim form and discharge receipt should be obtained from a bank branch, an insurance company branch, a hospital, or an insurance agent, among other places. Online versions of the claim and discharge forms are also accessible.
• The forms should then be entirely filled out and sent to the bank with all necessary papers. A death claim would necessitate the submission of the following documents:
• The insured’s death certificate,
• A copy of the nominee’s bank account’s cancelled cheque or
• A copy of the insured member’s cancelled check from the bank account where the scheme was purchased.

Steps which should be taken by the bank to settle a claim under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

The bank will have to perform some claim settlement measures after the nominee has submitted the claim via the above-mentioned steps.

• First and foremost, the bank would determine whether or not the member for whom the claim was lodged had a legitimate insurance policy. If the premium for the insurance was paid before to the insured member’s death and coverage for the year of death was still active when the insured died, the cover was said to be valid.
• The bank would then examine the claim form and verify the nominee’s information.
• The bank would fill in the relevant columns on the claim form.
• The bank then sends the claim form and discharge receipt, as well as the death certificate and a copy of the cancelled check, to the insurance company.
• The bank should notify the insurance carrier of the claim within 30 days of receiving the claim form from the nominee.

Steps taken by the insurance firm to resolve claims under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

• The insurance company will begin claim processing once it gets the claim notification from the bank along with the appropriate paperwork.
• The first stage in claim processing is to ensure that the claim form has been properly completed and that all needed documents have been submitted. In the event of a discrepancy, the insurance company would notify the bank, which would then ask the nominee to provide the missing information or papers.
• The insurance company would assess whether the member’s coverage was active or not in the event of a valid claim. If the policy was active, the company would also verify that the member had only one bank account with insurance coverage.
• The insurance company would pay the claim if everything was in order. The claim amount would be transferred straight to the nominee’s bank account, based on the information collected from the cancelled check given by the nominee.
• The insurance company would have a maximum of 30 days to disburse the claim amount from the date it received the bank’s claim notification.
• If the nominee submits a direct claim to the insurance company, the firm will first verify the claim’s veracity with the insured’s bank. The insurance company will only pay the claim amount once the bank has verified the claim.

Implementation of the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) scheme

The Pradhan Mantri Jeevan Jyoti Bima Yojana has been growing in leaps and bounds since its debut on May 9, 2015. Many people are signing up for the scheme because of the low premiums and the ease with which they can apply. As of the 14th of May, 2018, over 5.35 crore people had enrolled in the scheme.

The road ahead

The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) encourages the underprivileged and backward sections of society to obtain insurance at very low premium rates. The plan, however, is not limited to the impoverished; anyone with a bank account is eligible to participate. The coverage is adequate, and the costs are reasonable, allowing individuals to take advantage of insurance benefits. The government is also pushing the initiative to the general Indian populace in order to improve their lives. As a result, substantial enrolment in the system is envisaged in the coming years.

Related Posts

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Pradhan Mantri Jan Dhan Yojana

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The first thing that India followed was the Report of the High-Level Tax Panel India (HLTP) in order to reduce the complexity, as well as improve tax compliance, considering India’s population as a whole. One such way suggested by this panel was India’s new ITR forms India should make filing income taxes easy and simple for individuals living in India. Thus came into existence the new Income Tax Return forms ITR4, ITR5, and others which replace all previous individual income tax return formats and simplify them to make it easier for people to file their taxes from India for FY 2016-17. Form 12BB is one such form that has been introduced which helps an individual India to declare their Investment India.

Before you can complete your Investment Declaration India, it is important that you get all the details right so as to avoid any hassles later. You should also get clarity on certain sections of Form 12BB India before you start filing your taxes in India. The earlier sections in the form are about personal information and basic salary income tax deductions in India while the other parts will be about investment-related deductions in India.

Form 12BB

Form 12BB is a statement of an employee’s claims for tax deductions. A salaried employee must submit Form 12BB to his or her employer to collect tax benefits or rebates on investments and expenses beginning June 1, 2016. At the end of the fiscal year, Form 12BB must be submitted. All salaried taxpayers must file Form 12BB.

An employee must use Form 12BB to declare the investments they made throughout the year. These investments and expenses must be supported by documentation.

Generate Form 12BB

Form 12BB can be downloaded.

The following tax-saving investments and costs require an investment declaration:

House rent allowance

• Rent must be paid to the landlord, along with the landlord’s name, address, and PAN/Aadhaar number.

Leave travel concessions or assistance

• As part of your salary package, you may be eligible for a leave travel concession or leave travel allowance.

Home loan interest

• Interest due to the lender, as well as the lender’s name, address, and PAN/Aadhaar number

When working for company India, part of your salary comes with PF & EPF deductions India that come under Employee Provident Funds India or PPF (Public Provident Fund). These are deducted by an employer at source every month from your Indian salary. Every year there is an opportunity India for you to place claim India on the PF India deducted India, which generally happens in April. Form 12BB India can be your claim India document if you have made some investments during the year that are eligible for a tax deduction in India. It is important that while filing form 12BB India or investment declaration India 2016-17, all information about the same investments India should match with your previous years’ ITR forms India since there has been a significant change in tax rules of various instruments like PPF (Public Provident Fund) and NSC (National Savings Certificate).

India has also introduced the concept of LTCG (Long Term Capital Gains), which states that instead of paying short-term capital gains rate at 15%, your gains India will be tax-free India after a year of holding the investment India. This rule does not apply to all instruments in India and thus you should check Form 12BB India to see which specific instruments India are eligible for under the new rules India.

There has been an addition India of Section 80C India in form making it mandatory for everyone to declare all their investments in India if they want to get higher salary income tax deduction India benefits from their employer India. There is also a slight change in section 80 DD, which deals with deductions for savings bank interest earned on FDs (Fixed Deposits), Recurring Deposits, and other similar investments made by an individual Indian citizen. Under this scheme, just like LTCG India, India has made FDs India and savings bank interest India tax-free India if the amount India is held for a year India.

Investment Declaration Form 12BB India can be filed at any time of the financial year in India but it is generally done in the first quarter since that is when all employers in India will have details of your investments from previous years in India. If you have not invested anything in India during the FY 2016-17, then simply file form 12BB India with zero values India so as to avoid any errors or inconsistencies later on. This article provides an insight into the legal process behind filing investment declarations in India every individual living in India needs to follow. It also tells about some important sections on Form 12BB which need attention while filing. This article India can help to boost Indian salary India and make sure it is a tax-saving investment in India.

There has been an addition India of Section 80C India in form making it mandatory for everyone to declare all their investments in India if they want to get higher salary income tax deduction India benefits from their employer India. There is also a slight change in section 80 DD, which deals with deductions for savings bank interest earned on FDs (Fixed Deposits), Recurring Deposits, and other similar investments made by an individual Indian citizen. Under this scheme, just like LTCG India, India has made FDs India and savings bank interest India tax-free India if the amount India is held for a year India.

Investment India Declaration India Form India 12BB India can be filed in India at any time India of the financial year India but it is generally done in the first quarter since that is when all employers in India will have details of your investments from previous years India. If you have not invested anything in India during the FY 2016-17, then simply file form 12BB India with zero values India so as to avoid any errors or inconsistencies later on. This article provides an insight into the legal process behind filing investment declarations in India every individual living in India needs to follow. It also tells about some important sections on Form 12BB which need attention while filing. This India article India can help India to boost India’s salary India and make sure it is a tax-saving investment in India.

There has been an addition India of Section 80C India in form making it mandatory for everyone India to declare all their investments in India if they want to get higher salary income tax deduction benefits from their employer India. There is also a slight change in section 80 DD, which deals with deductions for savings bank interest earned on FDs (Fixed Deposits), Recurring Deposits, and other similar investments made by an individual Indian citizen. Under this scheme, just like LTCG India, India has made FDs and savings bank interest tax-free India if the amount is held for a year.

Investment India Declaration India Form India 12BB India can be filed in India at any time India of the financial year India but it is generally done in the first quarter since that is when all employers in India will have details of your investments from previous years India. If you have not invested anything in India during the FY 2016-17, then simply file form 12BB India with zero values India so as to avoid any errors or inconsistencies later on. This article provides an insight into the legal process behind filing investment declarations in India every individual living in India needs to follow. It also tells about some important sections on Form 12BB which need attention while filing India. This India article can help India to boost Indian salary and make sure it is a tax-saving investment.

Deductions under Section 80C, 80CCC, 80CCD

• Section 80C: Premium to be paid for life insurance and/or investments to be made in ELSS funds, PPF, NPS, and/or school tuition fees for children, etc
• Section 80CCC: Premium to be paid for annuity plan
• Section 80CCD: Additional contributions made to NPS

Deductions under other sections like 80E, 80G, 80TTA, etc.

• Section 80D: Premium to be paid for medical insurance
• 80E: Interest to be paid on education loan
• Section 80G: Donations to be made to specified organizations
• 80TTA: Interest income earned from a savings bank account

Frequently Asked Questions

What is the purpose of an investment declaration?

Employees must provide a statement of deductions and exemptions. According to on these declarations, the employer will deduct TDS from the employee’s salary. The majority of these investments must be made through the HR portal of the employer. Employees must provide a statement of deductions and exemptions. According to on these declarations, the employer will deduct TDS from the employee’s salary. The majority of these investments must be made through the HR portal of the employer.

When do I have to submit Form 12BB? 

Employers frequently request a declaration at the start of the fiscal year in order to estimate TDS computations for the entire year. Form 12BB must be completed and submitted near the end of the fiscal year.

Do I need to submit Form 12BB to the Income Tax Department? 

No, Form 12BB is not required to be sent to the IRS. It is required that you submit it to your employer.

I could not declare my investments on time and my employer has deducted excess TDS. What should I do? 

No, the tax department does not require Form 12BB to be submitted. It is required that you submit it to your boss.

Read, also: Form 12B: A Complete Guide
Form 16B – TDS Certificate for Sale of Property

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Types of Share Capital

Below given are the different types of share capital:

1. Authorized Share Capital

The total capital that a corporation accepts from its investors by issuing shares that are listed in the firm’s official documents is known as authorized share capital. Because a corporation is registered with this capital, it is also known as Registered Capital or Nominal Capital.

The limit of Authorised Capital is set by the Capital Clause in the Memorandum of Association, according to Section 2(8) of the Companies Act, 2013. The firm has the authority to take the necessary actions to expand the limit of authorized capital in order to issue more shares, but it is not permitted to issue shares that exceed the limit of authorized capital in any case.

Issued Share + Unissued Share = Authorized Share.

2. Issued Share Capital

The portion of Authorized Share Capital that is issued to the public for subscription is known as Issued Share Capital. Issuance, allocation, or allotment are the terms used to describe the act of issuing shares. To put it another way, Issued Share Capital is the subset of Authorized Share Capital. A subscriber becomes a shareholder after the allotment of shares.

3. Unissued Share Capital

Companies, as previously stated, commonly issue shares from time to time. As a result, their authorized and issued share capital will differ. The difference between the two sums will be the company’s unissued share capital. This unissued capital refers to the number of shares that a firm has available to raise capital.

4. Subscribed Capital

The portion of issued capital that has been sold to the public is known as subscribed capital. It is not necessary for the issued Capital to be fully subscribed by the general public. It is the portion of the issued capital for which the corporation has received an application. Let’s look at an example: If a firm issues 16000 shares of one hundred rupees each and the public only applies for 12000, the issued capital is Rs 16 lakh and the subscribed capital is Rs 12 lakh. The total number of outstanding and treasury shares is equal to the number of issued shares.

5. Called-Up Capital

Called-up Capital is the portion of the Subscribed Capital that comprises the shareholder’s payment. The capital is not given to the company in its whole at once. It makes use of a portion of the subscribed capital when it is required in installments. Uncalled Capital refers to the remainder of the Subscribed Capital.

6. Paid-Up Capital

Paid-up Capital is the portion of Called-up Capital that is paid by the shareholder. The shareholder does not have to pay the sum requested by the corporation. The shareholder may pay half of the called-up Capital, referred to as Reserved Capital, to the company.

7. Uncalled Share Capital

When a company issues shares to its shareholders, it expects them to pay for them. They may, however, choose not to do so. Uncalled share capital refers to shares that have been issued but not yet been claimed. This capital also refers to the shareholders’ contingent liabilities. It is the remaining amount after deducting the called-up capital from the total number of shares allotted.

8. Reserve Share Capital

Reserve capital is the amount of stock that a firm can’t sell unless it goes bankrupt. These shares are usually issued following a special resolution that receives more than three-quarters of the vote. Companies, likewise, cannot change their articles of incorporation to overturn this choice. Reserve share capital serves a specific purpose: to make liquidation easier.

Reserve capital is subject to a number of restrictions. Companies are unable to use this money as a form of security or convert it to ordinary capital. Companies, on the other hand, can have it overturned by obtaining a special court order. Reserve share capital reflects the capital that will not be available unless the company is liquidated.

9. Fixed and circulating share capital

A company’s subscribed capital includes circulating share capital. Operational assets, such as bank reserves, book debts, invoices receivable, and so on, provide this capital. These funds comprise funds used for a company’s fundamental operations. Fixed capital, which is made up of a company’s fixed assets, is also closely related.

The Balance Sheet’s Representation of Share Capital

In general, the share capital can be found in the company’s balance sheet under the heading ‘shareholder’s fund.’ The real capital is the paid-up capital, which represents the amount paid by the shareholders. It is also added to the liabilities side of the balance sheet to complete the column.

Conclusion

The amount of money raised by a company’s stockholders is referred to as share capital. It represents the par value of a company’s total number of outstanding shares in accounting. Companies can disclose numerous different types of share capital. Authorized, issued, subscribed, unissued, called-up, paid-up capital, and so on are examples of these terms. Companies issue shares to raise funds by diluting the original shareholders’ ownership interest. The price of a stock may fluctuate from time to time. As a result, it is preferable to invest wisely in the stock market. Furthermore, many people are perplexed by the distinction between shares and shares capital. A corporation’s share capital is the money raised through the sale of equity to investors, whereas a shareholder’s share is the percentage of the money paid to the company.

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Investing in real stock shares includes a lengthy process, a lot of paperwork. This account is necessary to keep the entire process simple and fast. Demat accounts are used to hold shares and securities in a dematerialized/electronic state while trading online. Dematerialization is the process of converting your share certificates from physical to electronic form in order to make them more accessible. To settle trades electronically, you’ll need a Demat Account number. If you wish to invest in the stock market, you need to have this account. It ensures that the entire process of stock trading is safe and efficient.

You can buy shares and store them safely with the help of this Account. It’s similar to a bank account in which you deposit money with the bank and keep track of your debit and credit balances in a bank passbook. Similarly, whether you buy or sell shares, your Demat Account will be credited or debited accordingly. It can be used to store a wide range of investments, including stocks, ETFs, mutual funds, bonds, and government securities. You can register a Demat Account without owning any shares and keep your account balance at zero.

Types 

There are mainly three types of Demat account:

1. Regular Demat Account

It is only for Indian residents who live in the country

2. Repatriable Demat account

This type of Demat account id only for Non- Indian Residents. It helps in transferring money abroad. But this Demat account has to be linked with the NRE bank account

3. Non-repatriable Demat account

This type of Demat account is also applicable on NRI’s. But in this type of Demat account transferring of funds is not possible. It has to be linked with an NRO account.

What advantages does a Demat Account provide?

• Transfer of ownership

This is used to transfer an investor’s stock holdings. In order to undertake share trading, a Delivery Instruction Slip (DIS) might be used. You can fill out this slip with all of the necessary information to ensure a seamless transaction.

• Availability of a loan

The securities in the Account may be used to qualify for a range of bank loans. These securities can be used as collateral to secure a loan from your bank.

• Dematerialization & rematerialization

Converting securities into multiple forms becomes a straightforward procedure if you have a Demat Account. You can offer your depository participant (DP) the required instructions for dematerialization, which is the process of converting physical share certificates into electronic form. Alternatively, you can have electronic assets converted to physical securities to meet your needs.

• Accessible in a variety of ways

A Demat Account can be accessed through a variety of media due to its electronic operation. You can use the Internet to undertake investing, trading, monitoring, and other security-related operations on a computer or smartphone.

• Corporate behavior

Having a Demat Account allows you to take advantage of the perks that come with owning stocks. When a corporation pays dividends, interest, or refunds to its investors, all Demat account holders automatically receive these benefits. Corporate actions involving equity shares, such as stock splits, right shares, and bonus issues, are also updated in the shareholders’ Demat Accounts.

• Demat accounts are being frozen.

Demat account holders can freeze their accounts for a set period of time, depending on their needs. This is done to prevent any unexpected debits or credits to the Demat Account.

• E-Facility

The National Securities Depository Limited (NSDL) continues to offer a variety of services to Demat account customers. The account holder can transmit instruction slips to the depository participant electronically instead of physically submitting them. It’s done to make the procedure go more quickly and smoothly.

What documents are needed to open a Demat Account?

You may think of this account as a bank account that holds securities rather than cash. The Demat account opening procedure and the mandatory documents required are similar across organizations. Check that any document with an expiration date is still valid on the submission date before submitting it.

Proof of Income

You may use any of the following as proof of income:

• A photocopy of the Acknowledgement Slip for the Income Tax Return (ITR) was submitted to the Income Tax Department during tax filing.
• A photocopy of the yearly statement of accounts validated by a Chartered Accountant or a certificate of net worth.
• Form 16 or the current month’s salary slip
• A statement of the Account holdings with a Depository Participant who is eligible.
• The most recent bank account statement, which includes the revenue history for the previous six months.
• Any paperwork proving asset ownership by self-declaration.

Identity Verification

As proof of identity, you may use any of the following:

• A genuine photograph is required for the PAN card.
• Aadhaar card, voter ID card, driver’s license, and passport are all acceptable forms of identification.
• Central/State Government and its Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions, University affiliated Colleges, Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council, and Credit/Debit cards issued by Banks all issue identity cards with the applicant’s photo.

Address Verification

You may use any of the following as proof of address:

• Passport/Voters Identification Card/Ration Card/Registered Residential Lease or Sale Agreement/Driving License/Flat Maintenance bill/Insurance Copy
• Utility bills that are less than three months old, such as landline phone bills and electricity/gas bills.
• A bank passbook that is no more than three months old is required.
• Judges of the High Court and Supreme Court self-declared their new addresses.
• Address evidence from bank management of Scheduled Commercial Banks/Scheduled Co-Operative Banks/Multinational Foreign Banks, Gazetted Officer / Notary public, Member of Legislative Assembly, Member of Parliament
• Identity cards with addresses are issued by the Central/State Government and its Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions, University affiliated Colleges, and Professional Bodies such as the ICAI, ICWAI, ICSI, and the Bar Council.
• Proof of address in the name of the spouse

What is the procedure for opening a Demat Account?

Follow these simple instructions to start this Account:

• To begin, select a Depository Participant (DP) with whom you want to open a Demat Account.
• Fill out an account opening form and attach a passport-sized photograph as well as photocopies of all essential papers, including proof of address and identification.
• Unless you are excluded, you should have a PAN card. It’s important to remember to bring the original documents with you for verification.
• The DP will provide you with a copy of the rules and regulations, as well as the terms of the agreement and any fees that must be paid.
• A representative of the DP will contact you during an In-Person Verification to check the information you provided on the account opening form.
• The DP will issue you an account number/client ID after the application has been processed. To access your Demat Account online, you’ll need these details.
• You can open a Demat Account even if you don’t own any shares. Furthermore, there is no requirement to maintain a certain level of balance.

When you open this account, you’ll have to pay an annual maintenance charge to keep your account running smoothly. In addition, you will be charged a transaction fee if you use your  Account to buy or sell securities. If your shares are in physical form, the DP may charge you an additional cost to dematerialize them.

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