A Critical Analysis of Issues Relating To Valuation of Shares of A Company

Abstract

The share capital is the most important requirement of a company, which provides funds to run a company and in return gives ownership to shareholders. Share capital of a company refers to the amount invested in the company to carry out its operations. It is divided into a number of indivisible units of a fixed amount. These units are known as ‘shares’. According to Section 2 (84) of the Companies Act, 2013, “a share means a share in the share capital of a company and includes stock”. It represents the interest of a shareholder in the company, measured for the purposes of liability and dividend. It attaches various rights and liabilities. The person who is the owner of the shares is called ‘Shareholder’ and the return he gets on his investment is called ‘Dividend’.