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Issue and Forfeiture of Shares: Summary Video Lecture | Accountancy Class 12 - Commerce

41 videos|106 docs|56 tests

FAQs on Issue and Forfeiture of Shares: Summary Video Lecture - Accountancy Class 12 - Commerce

1. What is the process of issuing shares in a company?
Ans. The process of issuing shares in a company involves the creation and allocation of new shares to individuals or entities. This typically requires the approval of the company's board of directors and shareholders, as well as compliance with legal and regulatory requirements. The company will issue a prospectus or offer document that provides details about the shares being offered, including the number of shares, their price, and any associated terms and conditions.
2. Can shares be forfeited?
Ans. Yes, shares can be forfeited by a company under certain circumstances. Share forfeiture occurs when a shareholder fails to comply with the terms and conditions set by the company, such as non-payment of calls on shares. The company can then exercise its right to cancel the shares and declare them forfeited. This means that the shareholder loses their ownership rights and any amount paid towards the shares. The forfeited shares can be re-issued or cancelled, depending on the company's decision.
3. What are the reasons for forfeiting shares?
Ans. There are several reasons why a company may decide to forfeit shares. These include non-payment of calls on shares, failure to provide necessary documentation, violation of company rules or regulations, breach of shareholder agreements, or any other non-compliance with the terms and conditions set by the company. Forfeiture is a legal action taken by the company to protect its interests and enforce shareholder obligations.
4. Can a shareholder reclaim forfeited shares?
Ans. In some cases, a shareholder may have the opportunity to reclaim forfeited shares. This usually depends on the specific circumstances and the company's policies. If the shareholder pays any outstanding amounts, penalties, or costs associated with the forfeited shares, the company may allow them to reclaim the shares. However, it is important to note that the company is not obligated to offer this opportunity, and it ultimately depends on the company's discretion and the terms of the forfeiture.
5. What happens to the forfeited shares after forfeiture?
Ans. After shares are forfeited, the company has the option to either re-issue or cancel them. If the company decides to re-issue the forfeited shares, it can offer them to new shareholders or existing shareholders who wish to purchase additional shares. This process is typically outlined in the company's articles of association or shareholder agreements. On the other hand, if the company decides to cancel the forfeited shares, they are permanently removed from the company's share capital and cease to exist.
41 videos|106 docs|56 tests
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