Issues of
Capital.

[72

SECRETARIAL PRACTICE
accounts of a large trading concern which may be held to
reflect upon the work of the secretary in his primary capacity
of chief official, and as the focussing point under the directors
of the whole of the concerns of his company. There are
of course other matters of account in which the fully equipped
secretary will be interested, even if the magnitude of his
company makes it impracticable for him to take any active
part in the book-keeping. These matters of account are
those dealing with the company as a legal entity, such as, for
example capital and dividend accounts. The secretary of
a large company will find that calculating machines are an
essential part of office equipment.

A company having decided to issue the whole or part of
the authorised capital, the necessary board minutes and
arrangements for the issue will be made, and it will then be
the duty of the secretary to see that the money for the shares
is paid into the banking account of the company, and he will
first of all collect the amount due from the original subscribers,
and when this is paid into the company’s banking accounts,
it will, in the ordinary way, be entered in the share cash book.

A separate account must be opened at the bankers called

Share Capital—Application Account,” and the application
forms will be collected day by day from the bank, agreed
with the pass book, and entered in detail in a share cash
book. If the issue has been over-subscribed, the surplus
amount will remain to the credit of the ‘Application Account’
until after allotment, when it will be transferred to the
‘Allotment Account” and credited to the individual sub-
scribers in respect of amounts payable on allotment.

As soon as the allotment letters have been posted, an
account will be opened at the bank called ‘Share Capital:
Allotment Account.’ The amounts received on allotment,
and subsequently the amounts received on calls, will ‘be
dealt with in the same manner as in the case of amounts
received on applications. In dealing with issues of debenture
stock, the same methods will apply.

In the case of debenture stock, if, as is often the case, the
trust deed has not been executed and the security completed
before the issue is made, the trustees for stock holders
generally insist that moneys received from the subscribers
should remain under the control of the trustees until the
security has been constituted.

In the event of shares being issued at a premium, or of a
commission being paid on their issue, or of debentures being
issued at a discount or at a premium, the amount of the in-
stalment will vary. In the case of an issue at a discount,
where the debentures are terminable and repayable at par,