TMI BlogForfeiture of SharesX X X X Extracts X X X X X X X X Extracts X X X X ..... eeks to lay down a set of principles for forfeiture of both equity and preference shares arising from non-payment of calls. Definitions The following terms are used in this standard with the meaning specified: Act means the Companies Act, 1956 (1 of 1956) , or any statutory modification or re-enactment thereof. Articles means the articles of association of a company. Board means the Board of directors of a company. Call means a demand made by the company on members for payment of an amount due on shares in respect of nominal value or premium or both. Unless the context otherwise requires, words and expressions used herein and not defined shall have the meaning respectively assigned to them under the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dy paid thereon will be forfeited. If the notice is not given, the forfeiture cannot be effected. 2.4 Forfeiture on non-payment - If the amount payable specified in the notice was not paid within the stipulated date, any share in respect of which the notice has been given may at any time thereafter be forfeited. Any entitlement of the defaulting member for dividends on his partly paid up shares may be adjusted against his dues on calls. 3. Requirements of Forfeiture 3.1 The Board at a duly convened meeting should approve the forfeiture and authorize any director or manager or the secretary to make a declaration of such forfeiture - An authenticated list of shares to be forfeited together with the names of shareholders there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest. The member whose shares have been forfeited should be duly informed by the Board on revoking the forfeiture and restoring the name of the member on the register of members. 5. Effect of Forfeiture 5.1 A person whose shares have been forfeited would cease to be a member of the company, in respect of those shares. 5.2 A person whose shares have been forfeited would notwithstanding the forfeiture, remain liable to pay to the company all moneys, which at the date of forfeiture were payable by him to the company in respect of the shares - The liability of the defaulting member shall not cease till the company receives the full payment which is due in respect of shares. The name of the defaulting member will be placed as a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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