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प्रश्न
Justify the following statement.
Board of Directors have the authority to forfeit shares.
उत्तर
Justification:
- Forfeiture of shares is a process where the company forfeit the shares of a member or shareholder who fails to pay the call on shares or instalments of the issue price of his shares within a certain period of time after they fall due.
- In other words, when the shareholder fails to pay the full amount of share which he agreed to pay in instalments the company can cancel his shares.
- If a shareholder fails to pay calls on shares within a certain period, the Board of Directors, if authorised by the Articles of Association, can forfeit i.e. take away the ownership of a member.
- The company will give 14 days' notice after 14 days if the shareholder does not pay the company will forfeit his shares and strike his name from the register of shareholders. Thus, it is rightly justified that, Board of Directors has the authority to forfeit shares.
APPEARS IN
संबंधित प्रश्न
The balance of Share Forfeiture A/c is transferred to _________ account after re-issue of these share.
State true or false with reason.
Directors can forfeit the shares for any reason.
State whether you agree or disagree with following statement:
Directors can re-issue forfeited shares.
Answer in one sentence only.
What is Forfeiture of Shares?
Write a word or a term or a phrase which can substitute the following statement.
Penal action taken by company on non-payment of calls.
State whether the following statement is true or false.
Only fully paidup shares can be forfeited.
Complete the sentence.
Company can forfeit only ______ paid shares.
Answer in one sentence.
When can a company forfeit shares?
Correct the underlined word and rewrite the following sentence.
Only fully paid up shares can be forfeited.
Explain the following term/concept.
Forfeiture of shares
Study the following case/situation and express your opinion.
X owns 100 shares while Y owns 500 shares of Red Tubes Ltd. The company has asked all its shareholders to pay the balance unpaid amount of ₹ 20. X pays the full money demanded by the company. Y, who is in a bad financial position is unable to pay any money.
- Can the company forfeit the shares of Y?
- Can the company forfeit the shares of X?
- Can X transfer his shares?
Answer in brief.
What are the effects of forfeiture of shares?
The Subscribed Capital of Parag Limited is 30,000 equity shares of ₹ 100 each and 50,000 preference shares of ₹ 100 each. On both of these shares ₹ 80 per share were called-up.
The Directors forfeited 500 equity shares held by Ashish who failed to pay First and Second Call each of ₹ 20 per share. They also forfeited 500 preference shares of Ashok who failed to pay ₹ 20 per share on Allotment, ₹ 20 per share on First call and ₹ 20 per share on Second call.
The Director re-issued these forfeited shares of Ashish at ₹ 60 per share, ₹ 80 paid up and those of Ashok at ₹ 72 per share ₹ 80 paid up. All re-issued shares were taken up by Anagha.
Pass Journal entries to record the forfeiture and re-issue of shares in the books of Parag Ltd.
Only fully paid-up shares can be forfeited.
Find the odd one.
