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a company has authorised capital 10,00,000 divided into 100,000 shares of 10 each . company issued 60000 shares: application 2 , allotment 7 ( ip 4) ,ist and final call is 5 .all the amount duly received accept 200 shares and later issued at rs 7 fully paid
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a company has authorised capital 10,00,000 divided into 100,000 shares...
Issue and Forfeiture of Shares: Summary
Issuing shares is one of the ways for a company to raise capital. However, issuing shares also comes with certain responsibilities and procedures that need to be followed. In this summary, we will discuss the process of issuing shares and the concept of forfeiture of shares.
Issuing Shares
The process of issuing shares involves the following steps:
1. Authorised Capital: The maximum amount of capital that a company can raise by issuing shares is called authorised capital. This amount is mentioned in the Memorandum of Association.
2. Issued Capital: The actual amount of capital that a company has raised by issuing shares is called issued capital. This amount is mentioned in the Articles of Association.
3. Application: When a company decides to issue shares, it invites the public to apply for them. The application form contains details such as the number of shares being applied for and the price at which they are being offered.
4. Allotment: After the application process is complete, the company allots shares to the applicants. The allotment letter contains details such as the number of shares allotted, the amount paid, and the amount due.
5. Call: The company may ask the shareholders to pay the balance amount due on the shares by making a call. The call letter contains details such as the amount due, the due date, and the consequences of non-payment.
Forfeiture of Shares
When a shareholder fails to pay the amount due on the shares, the company may forfeit the shares. Forfeiture of shares means cancelling the shares and taking back the amount paid by the shareholder. The process of forfeiture involves the following steps:
1. Notice: The company sends a notice to the shareholder asking them to pay the amount due within a specified time.
2. Resolution: If the shareholder fails to pay the amount due within the specified time, the company passes a resolution forfeiting the shares.
3. Reissue: The forfeited shares can be reissued by the company at a later date, either at their face value or at a premium.
Conclusion
Issuing shares is an important way for a company to raise capital. However, the process of issuing shares and the concept of forfeiture of shares need to be understood and followed carefully to avoid legal issues.
Issuing shares is one of the ways for a company to raise capital. However, issuing shares also comes with certain responsibilities and procedures that need to be followed. In this summary, we will discuss the process of issuing shares and the concept of forfeiture of shares.
Issuing Shares
The process of issuing shares involves the following steps:
1. Authorised Capital: The maximum amount of capital that a company can raise by issuing shares is called authorised capital. This amount is mentioned in the Memorandum of Association.
2. Issued Capital: The actual amount of capital that a company has raised by issuing shares is called issued capital. This amount is mentioned in the Articles of Association.
3. Application: When a company decides to issue shares, it invites the public to apply for them. The application form contains details such as the number of shares being applied for and the price at which they are being offered.
4. Allotment: After the application process is complete, the company allots shares to the applicants. The allotment letter contains details such as the number of shares allotted, the amount paid, and the amount due.
5. Call: The company may ask the shareholders to pay the balance amount due on the shares by making a call. The call letter contains details such as the amount due, the due date, and the consequences of non-payment.
Forfeiture of Shares
When a shareholder fails to pay the amount due on the shares, the company may forfeit the shares. Forfeiture of shares means cancelling the shares and taking back the amount paid by the shareholder. The process of forfeiture involves the following steps:
1. Notice: The company sends a notice to the shareholder asking them to pay the amount due within a specified time.
2. Resolution: If the shareholder fails to pay the amount due within the specified time, the company passes a resolution forfeiting the shares.
3. Reissue: The forfeited shares can be reissued by the company at a later date, either at their face value or at a premium.
Conclusion
Issuing shares is an important way for a company to raise capital. However, the process of issuing shares and the concept of forfeiture of shares need to be understood and followed carefully to avoid legal issues.
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a company has authorised capital 10,00,000 divided into 100,000 shares of 10 each . company issued 60000 shares: application 2 , allotment 7 ( ip 4) ,ist and final call is 5 .all the amount duly received accept 200 shares and later issued at rs 7 fully paid Related: Issue and Forfeiture of Shares: Summary?
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