{"id":1097,"date":"2021-02-11T11:50:26","date_gmt":"2021-02-11T06:20:26","guid":{"rendered":"https:\/\/scholarsclasses.com\/blog\/?p=1097"},"modified":"2025-10-05T10:57:10","modified_gmt":"2025-10-05T05:27:10","slug":"issue-of-shares","status":"publish","type":"post","link":"https:\/\/scholarsclasses.com\/blog\/issue-of-shares\/","title":{"rendered":"Issue of Shares | Company Accounts Companies Act 2013"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_81 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d82e1bcc3b1\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d82e1bcc3b1\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/scholarsclasses.com\/blog\/issue-of-shares\/#Issue_of_Shares_Meaning\" >Issue of Shares Meaning<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/scholarsclasses.com\/blog\/issue-of-shares\/#Types_of_Shares\" >Types of Shares:<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/scholarsclasses.com\/blog\/issue-of-shares\/#a_Equity_Shares\" >(a) Equity Shares:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/scholarsclasses.com\/blog\/issue-of-shares\/#b_Preference_Shares\" >(b) Preference Shares:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/scholarsclasses.com\/blog\/issue-of-shares\/#Procedure_for_Issue_of_Shares\" >Procedure for Issue of Shares:<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/scholarsclasses.com\/blog\/issue-of-shares\/#a_Issue_of_Prospectus\" >(a) Issue of Prospectus:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/scholarsclasses.com\/blog\/issue-of-shares\/#b_Application_of_Shares\" >(b) Application of Shares:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/scholarsclasses.com\/blog\/issue-of-shares\/#c_Allotment_of_Shares\" >(c) Allotment of Shares<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/scholarsclasses.com\/blog\/issue-of-shares\/#d_Calls_on_Shares\" >(d) Calls on Shares:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/scholarsclasses.com\/blog\/issue-of-shares\/#e_Calls%E2%80%93in%E2%80%93Arrears\" >(e) Calls\u2013in\u2013Arrears:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/scholarsclasses.com\/blog\/issue-of-shares\/#f_Calls%E2%80%93in%E2%80%93Advance\" >(f) Calls\u2013in\u2013Advance:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/scholarsclasses.com\/blog\/issue-of-shares\/#Issue_of_shares_at_a_Premium\" >Issue of shares at a Premium:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/scholarsclasses.com\/blog\/issue-of-shares\/#Issue_of_shares_at_a_discount\" >Issue of shares at a discount:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/scholarsclasses.com\/blog\/issue-of-shares\/#Journal_Entries\" >Journal Entries:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/scholarsclasses.com\/blog\/issue-of-shares\/#Under_Over_and_Full_Subscription\" >Under, Over, and Full Subscription<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/scholarsclasses.com\/blog\/issue-of-shares\/#Forfeiture_of_Shares\" >Forfeiture of Shares:<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/scholarsclasses.com\/blog\/issue-of-shares\/#Legal_Framework\" >Legal Framework<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/scholarsclasses.com\/blog\/issue-of-shares\/#Those_provisions_provide_that\" >Those provisions provide that<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/scholarsclasses.com\/blog\/issue-of-shares\/#Solved_questions_based_on_forfeiture_and_re-issue_of_shares\" >Solved questions based on forfeiture and re-issue of shares.<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading has-text-align-center has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Issue_of_Shares_Meaning\"><\/span>Issue of Shares Meaning<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"has-vivid-purple-color has-text-color has-link-color wp-elements-df6477d93187cdb7315a80e668527851\"><strong>Definition<\/strong><br>A \u201cshare\u201d has been defined by the Indian Companies Act, under sec.2(46) as \u201cA share is the share in the Capital of the Company\u201d.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Types_of_Shares\"><\/span><strong>Types of Shares:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A Company can issue two types of shares \u2013 Equity and Preference.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"a_Equity_Shares\"><\/span><strong>(a) Equity Shares:<\/strong> <span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Equity shares mean that part of the share capital which is not a Preference share capital. It means all such shares that are not Preference shares. Equity shares are also called as Ordinary Shares.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"b_Preference_Shares\"><\/span><strong>(b) Preference Shares:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Preference shares are those shares that fulfill both the following two conditions:<br>(i) They carry preferential share rights in respect of dividends at a fixed rate,<br>(ii) They also carry preferential rights regarding payment of capital on winding up of the company.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Procedure_for_Issue_of_Shares\"><\/span><strong>Procedure for Issue of Shares:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"a_Issue_of_Prospectus\"><\/span><strong>(a) Issue of Prospectus:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Whenever shares are to be issued to the public the company must issue a prospectus. Prospectus means an open invitation to the public to take up the shares of the company thus a private company needs not to issue prospectus. Even a Public Company issuing it&#8217;s shares<br>privately need not issue a prospectus. However, it is required to file a \u201cStatement in lieu of Prospectus\u201d with the register of companies. The Prospectus contains relevant information like names of Directors, terms of issue, etc. It also states the opening date of the subscription list, the amount payable on application, on allotment &amp; the earliest closing date of the subscription list<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"b_Application_of_Shares\"><\/span><strong>(b) Application of Shares:<\/strong> <span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>A person intending to subscribe to the share capital of a company has to submit an application for shares in the prescribed form, to the company along with the application money before the last date of the subscription mentioned in the prospectus. <br>Over Subscription: If the no. of shares applied for is more than the no. of shares offered to the public then that is called as over Subscription.<br>Under Subscription: If the no. of shares applied for is less than the no. of shares offered to the public then it is called as Under Subscription.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"c_Allotment_of_Shares\"><\/span><strong>(c) Allotment of Shares<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>After the last date of the receipt of applications is over, the Directors, Provide with the allotment work. However, a company cannot allot the shares unless the minimum subscription amount mentioned in the prospectus is collected within a stipulated period. The Directors pass a resolution in the board meeting for allotment of shares, indicating clearly the class &amp; no. of shares allotted with the distinctive numbers. Then Letters of Allotment are sent to the concerned applicants. Letters of Regret are sent to those who are not allotted any shares &amp; application money is refunded to them.<br><span class=\"has-inline-color has-luminous-vivid-orange-color\">Partial Allotment:<\/span> In partial allotment, the company rejects some application totally refunds their application money &amp; allots the shares to the remaining applicants.<br><span class=\"has-inline-color has-luminous-vivid-orange-color\">Pro-rata Allotment:<\/span> When a company makes a pro-rata allotment, it allots shares to all applicants but allots lesser shares then applied for E.g. If a person has applied for three hundred shares he may get two hundred shares.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"d_Calls_on_Shares\"><\/span><strong>(d) Calls on Shares:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p><strong> <\/strong>The remaining amount of shares may be collected in installments as laid down in the prospectus. Such installments are called calls on Shares. They may be termed as \u201cAllotment amount, First Call, Second Call, etc.\u201d<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"e_Calls%E2%80%93in%E2%80%93Arrears\"><\/span><strong>(e) Calls\u2013in\u2013Arrears:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Some shareholders may not pay the money due to them. The outstanding amounts are transferred to an account called up as a \u201cCalls-in-Arrears\u201d account. The Balance of the calls-in-arrears account is deducted from the Called-up capital in the Balance Sheet.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"f_Calls%E2%80%93in%E2%80%93Advance\"><\/span><strong>(f) Calls\u2013in\u2013Advance:<\/strong> <span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>According to sec.92 of the Companies Act, a Company may if so authorized by it\u201fs articles, accept from a shareholder either the whole or part of the amount remaining unpaid on any shares held by them, as Calls in advance. No dividend is paid on such calls in advance. However, interest has to be paid on such calls in advance.<\/p>\n\n\n\n<p>Video lectures on the Issue of Shares:<br><a href=\"https:\/\/youtu.be\/gqC-XCE_8L4\" data-type=\"link\" data-id=\"https:\/\/youtu.be\/gqC-XCE_8L4\" target=\"_blank\" rel=\"noopener\">Lecture 1<\/a><br><a href=\"https:\/\/youtu.be\/YdIbNGFTJz4\" data-type=\"link\" data-id=\"https:\/\/youtu.be\/YdIbNGFTJz4\" target=\"_blank\" rel=\"noopener\">Lecture 2<\/a><br><a href=\"https:\/\/youtu.be\/jXxxbTL-PIE\" data-type=\"link\" data-id=\"https:\/\/youtu.be\/jXxxbTL-PIE\" target=\"_blank\" rel=\"noopener\">Lecture 3<\/a><br><a href=\"https:\/\/youtu.be\/KUs2vNzQTXk\" data-type=\"link\" data-id=\"https:\/\/youtu.be\/KUs2vNzQTXk\" target=\"_blank\" rel=\"noopener\">Lecture 4<\/a><br><a href=\"https:\/\/youtu.be\/cuXeky3fJN4\" data-type=\"link\" data-id=\"https:\/\/youtu.be\/cuXeky3fJN4\" target=\"_blank\" rel=\"noopener\">Lecture 5<\/a><br><a href=\"https:\/\/youtu.be\/Q5FAA1Fhkao\" data-type=\"link\" data-id=\"https:\/\/youtu.be\/Q5FAA1Fhkao\" target=\"_blank\" rel=\"noopener\">Lecture 6<\/a><br><a href=\"https:\/\/youtu.be\/BrtSVvfZZ_c\" data-type=\"link\" data-id=\"https:\/\/youtu.be\/BrtSVvfZZ_c\" target=\"_blank\" rel=\"noopener\">Lecture 7<\/a><br><a href=\"https:\/\/youtu.be\/ozhNh9kMdMg\" data-type=\"link\" data-id=\"https:\/\/youtu.be\/ozhNh9kMdMg\" target=\"_blank\" rel=\"noopener\">Lecture 8<\/a><\/p>\n\n\n\n<p><strong>Terms of Issue of Shares:<\/strong><\/p>\n\n\n\n<p>A limited company may issue shares on the following terms.<br>(a) Issue of Shares for Consideration other than cash or for cash or on capitalization of reserve<br>(b) Issue of Shares at par i.e. at face value or at nominal value.<br>(c) Issue of Shares at a Premium i.e. at more than face value.<br>(d) Issue of Shares at a Discount i.e. at less than the face value.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Issue_of_shares_at_a_Premium\"><\/span>Issue of shares at a Premium:<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>When the shares are issued at a price higher than the nominal value of the shares then it is called as shares issued at a premium. The amount of premium is decided by the Board of Directors as per the guidelines issued by SEBI. Such share premium collected by the company is credited to a separate A\/c called as \u201cSecurities Premium A\/c\u201d. Although Securities Premium is a profit to the company, it is not a revenue profit, it is treated as capital profit, which can be utilized only for the following purposes as per sec. 78 of the Companies Act \u2013<br>(a) Issue of fully paid bonus shares to the existing shareholders.<br>(b) Writing off the preliminary expenses of the company.<br>(c) Writing off the expenses of issue or the commission paid or discount allowed on any issue of shares\/debentures.<br>(d) Providing the premium payable on redemption of preference shares or debentures. The company can utilize the security Premium for any other purpose only on obtaining the<br>sanction of the court.<br><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Issue_of_shares_at_a_discount\"><\/span><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-black-color\">Issue of shares at a discount:<\/mark><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The Companies Act permits the issue of shares at a discount subject to the following conditions. (sec. 79) a) The issue must be of a class of shares already issued.<br>(b) Not less than 1 year has at the date of issue elapsed since the date on which the company became entitled to commence business.<br>(c) The issue at a discount is authorized by a resolution passed by the company in the general meeting &amp; sanctioned by the company law board.<br>(d) The maximum rate of discount must not exceed 10% or such rate as the company law board may permit.<br>(e) The shares to be issued at a discount must be issued within two months of the sanction by the company law board or within such extended time as the company law board may allow.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Journal_Entries\"><\/span><strong>Journal Entries:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p><span class=\"has-inline-color has-vivid-red-color\">1) For the receipt of the application money<\/span><\/p>\n\n\n\n<p><span class=\"has-inline-color has-vivid-red-color\">2) Transfer of Application money to Share Capital<\/span><br>Share Application A\/c..\u2026\u2026\u2026\u2026.. Dr. XXX<br>To Share Capital A\/c XXX<br><br><span class=\"has-inline-color has-vivid-red-color\">3) Amount due on Allotment<\/span><br>Share Allotment A\/c\u2026\u2026\u2026\u2026\u2026\u2026Dr. XXX<br>To Share Capital A\/c XXX<br><br><span class=\"has-inline-color has-vivid-red-color\">4) Receipt of Allotment money.<\/span><br>Bank A\/c\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.Dr. XXX<br>To Share Allotment A\/c XXX<br><br><span class=\"has-inline-color has-vivid-red-color\">5) For making the First Call<br><\/span>Share First Call A\/c\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..Dr. XXX<br>To Share Capital A\/c XXX<br><br><span class=\"has-inline-color has-vivid-red-color\">6) For the receipt of First Call Money<br><\/span>Bank A\/c\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026Dr. XXX<br>To Share First Call A\/c XXX<br><br><span class=\"has-inline-color has-vivid-red-color\">7) For making the Second &amp; Final Call<br><\/span>Share First Call A\/c\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..Dr. XXX<br>To Share Capital A\/c XXX<br><br><span class=\"has-inline-color has-vivid-red-color\">8) For the receipt of Second &amp; Final Call<br><\/span>Bank A\/c\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026Dr. XXX<br>To Share First Call A\/c XXX<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Under_Over_and_Full_Subscription\"><\/span><strong>Under, Over, and Full Subscription<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>&nbsp;Under Subscription of shares<\/strong><\/p>\n\n\n\n<p>A company offers&nbsp;shares&nbsp;to the public inviting applications for their subscription. When the number of shares applied for by the public is less than the number of shares issued by the company, it is a situation of under-subscription.<\/p>\n\n\n\n<p>Generally, a company that is newly set up or does not have a good reputation in the&nbsp;market&nbsp;receives under-subscription. Usually, such companies opt for the underwriting of the shares.<\/p>\n\n\n\n<p>However, if a company receiving under-subscription receives the minimum subscription, it can allot the shares for which it receives the application.<\/p>\n\n\n\n<p><strong>Over-subscription of shares<\/strong><\/p>\n\n\n\n<p>When a company receives applications for shares more than the number of shares it has offered to the public, it is known as over-subscription of shares. Usually, the companies with strong financial background or good reputation in the market or profitable future prospects receive over-subscription of shares.<\/p>\n\n\n\n<p>According to the guidelines of SEBI, a company cannot out-rightly reject any application. However, it can do so where the information is incomplete, the signature is not there or the application money is insufficient.<br><\/p>\n\n\n\n<p><strong>Full subscription of shares<\/strong><\/p>\n\n\n\n<p>When a company receives applications for shares equal to the number of shares it has offered to the public, it is known as a Full subscription of shares.<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Forfeiture_of_Shares\"><\/span>Forfeiture of Shares:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Forfeiture of shares is a process where the company forfeits the shares of a member or shareholder who fails to pay the call on shares or installments 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 installments, the company can cancel his shares.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Legal_Framework\"><\/span>Legal Framework<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>When the shares are issued by the company, generally the shareholders are not asked to pay the whole amount of share at once. It happens in installments. The company makes these calls on shares when it requires further capital.<\/p>\n\n\n\n<p>The company may call up the unpaid money from the shareholders when it is needed from time to time. The board of directors is required to pass a resolution to make a call on shares. The articles of the company should contain the provisions regarding this call on shares, and if nothing is mentioned in the articles, then Regulations 13-18 of table F of Schedule I of the Companies Act, 2013, will apply.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Those_provisions_provide_that\"><\/span>Those provisions provide that<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<ol class=\"wp-block-list\">\n<li>The amount called must not be more than one-fourth of the face value of the share.<\/li>\n\n\n\n<li>The dates of two consecutive calls must differ by at least a month.<\/li>\n\n\n\n<li>A minimum of fourteen days\u2019 notice must be given to members.<\/li>\n\n\n\n<li>The notice has to mention the time, place, and amount of the call on shares.<\/li>\n<\/ol>\n\n\n\n<p>Generally, the company will give 14 days\u2019 notice to the shareholder, and after 14 days, if the shareholder is not willing to pay the money, the company will forfeit the shares of that shareholder. &nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Solved_questions_based_on_forfeiture_and_re-issue_of_shares\"><\/span>Solved questions based on forfeiture and re-issue of shares.<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Learn <a href=\"https:\/\/scholarsclasses.com\/blog\/vertical-income-statement\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/vertical-income-statement\/\">Vertical Income Statement<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#46;&#46;&#46;<\/p>\n","protected":false},"author":1,"featured_media":92,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[568],"class_list":["post-1097","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-misc","tag-issue-of-shares"],"_links":{"self":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/1097","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/comments?post=1097"}],"version-history":[{"count":34,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/1097\/revisions"}],"predecessor-version":[{"id":38357,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/1097\/revisions\/38357"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media\/92"}],"wp:attachment":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media?parent=1097"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/categories?post=1097"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/tags?post=1097"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}