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Sir why security premium and CRR cant be applied for payment of unpaid amount on any shares held by existing shareholders ..? As it is also like bonus issues right?
Answers (2)
Yes, like bonus issue, but allowing it for unpaid shares, might be in some cases detrimental to interests of creditors. Say, when a loan was extended to company, creditors also took a note of the fact, okay X amout is unpaid on shares - which means when company get that, it would also be sort of security for them. But later, company instead of making call, allow CRR / SPR to be used, so increase in assets that would have been possible with call money is not the case now, creditors may not be happy. This is just a basic example for you to understand.
Issuing bonus shares are not same as making unpaid into fully paid up shares..... Technically the no. of shares doesnt increase for making unpaid to fully paid but for issuing bonus shares, no. of shares will increase SR & CRR are to be used across for all shareholders in case of bonus shares to transfer the benefit in place of dividend.... Unpaid amount is the liabiltiy due from shareholder
