A company needs funds for extension and development purpose without increasing its share capital, it can borrow from the general public by issuing certificates for a fixed period of time and at a fixed rate of interest. Such a loan certificate is called a debenture.

According to section 45 of the companies Act, 2013 each share of the share capital of the company shall be distinguished with a distant number for its individual identification. However, such distinction shall not be required, if the shares are held by a person whose name is entered as holder of beneficial internet as per the records of a company.

Right shares are the shares which are issued by the company, with the aim of increasing the subscribed share capital of the company by further issue, if it is authorized by its Articles."The right shares are primarily issued to the existing equity shareholders through a letter of an issue, on pro rata basis.

The term 'preference shares' means that part of the share capital the holders of which have a preferential right over payment of dividend (fixed amount or rate) and repayment of share capital in the event of winding up of the company.

Formation of a company has been divided into four stages :
(i) Promotion
(ii) Registration
(iii) Capital Subscription and
(iv) Commencement of Business.

The main objectives of Company Law 1956 are:
(i) To sustain the trust and faith of Shareholders
(ii) To protect and preserve the rights of Shareholders
(iii) To have drastic control over all the activities of the company
(iv) To make regulation of an effective Annual Meeting,
(v) The investment of the general public should be used for the development of society or social welfare activities.

(i) The definition of the term 'Share' under the Companies Act, 1956 (section 2(46)) includes stock.
(ii) A company can convert its shares into stock and vice versa by following the provisions of Table A (Article 36 - 39).
(iii) Stock is created from fully paid shares by passing an ordinary resolution in the general meeting.
(iv) The Article of Association of the company must permit this conversion.

'Formation of a company' has been divided into four stages: 1. Promotion 2. Registration 3. Capital subscription and 4. Commencement of business.
1. Promotion : Promotion stage begins when the idea to form company comes in the mind of a person. The Person who envisages the idea is called promoter.
2. Registration : The second stage in the formation of the company is incorporation on registration. In this stage the promoter does the following.
(i) Application for availability of name of company
(ii) Preparations of memorandum and articles of association.
(iii) Declaration from the professional, etc.
3. Capital Subscription : Both private company and public company not having share capital can commence its business after the completion of the above stages.
But a public limited company having its share capital has to pass through two more stages:
Example
(i) The fulfilling formalities to raise necessary capital
(ii) Fulfilling the condition for valid allotment by director.
(iii) Despatch allotment letters to allottees.
4. Commencement : As per section 11 of the Act, a company having share capital should file with the registrar declaration starting that
(i) Every subscriber to the memorandum has paid the value of shares agreed to be taken by him.
(ii) Paid up capital is not less than Rs 5 lakhs in the case of public limited company and Rs. 1 lakh in the case of private limited company.
(iii) It has filed the Registrar the verification of the Registered Office.