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Shareholder's Funds Become Zero

10 January 2020

Dear Friends,

Share Capital is 1 crore and RE is 1.1 Crore. Where it will be impact in our Balance Sheet. What action is required for Losses are greater than Share Capital.

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5 Replies

sabyasachi mukherjee (27105 Points)
Replied 11 January 2020

What is re?
is it reserves and surplus?

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Kapadia Pravin (17254 Points)
Replied 11 January 2020

You mean to say against share capital of 1 crore, Retained Earnings (RE) is 1.1 crore.

RE will appear as P & L Account in Balance sheet either side of BS depending upon + /- balance.

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Mohanraj J (1166 Points)
Replied 11 January 2020

Dear Kapadi, Yes ofcourse Retained Earnings is always appeared in PL and we need to show in the Balance Sheet too. Shareholder's Funds = Share Capital + Retained Earnings. But, my query is Retained Earnings (Losses) are more than Share Capital. So, how it will be affected the share holders? we need to intimate to them ? any ROC compliances?

Kapadia Pravin (17254 Points)
Replied 11 January 2020

Company Secretary will handle ROC filings. No extra ROC filings.

Shareholders come to know through Annual Report along with Directors Report and Audited accounts. It's common sir.

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