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Forfeiture & Re - Issue of Shares - Introduction Video Lecture | Advanced Corporate Accounting - B Com

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FAQs on Forfeiture & Re - Issue of Shares - Introduction Video Lecture - Advanced Corporate Accounting - B Com

1. What is the process of forfeiture of shares?
Ans. When a shareholder fails to pay for the shares they have subscribed to, the company can forfeit those shares. This means the shareholder loses ownership of the shares and any amount already paid on them.
2. Can forfeited shares be re-issued by the company?
Ans. Yes, after shares have been forfeited, the company can re-issue them to new shareholders. This process allows the company to generate additional funds by selling the forfeited shares.
3. What are the reasons for a company to forfeit shares?
Ans. Companies typically forfeit shares due to non-payment by shareholders, breach of terms, or failure to comply with company regulations. Forfeiture helps the company maintain control over its share capital.
4. How does the re-issuance of shares impact the company's financial position?
Ans. Re-issuing forfeited shares can improve the company's financial position by raising additional capital. It also helps in maintaining an optimal capital structure and utilizing funds for growth and expansion.
5. Are there any legal implications of forfeiting and re-issuing shares for a company?
Ans. Yes, there are legal implications involved in the process of forfeiture and re-issuance of shares. Companies must follow the regulations and guidelines set by the relevant authorities to ensure compliance and avoid any legal issues.
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