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Forfeiture of fully paid up shares?
Accountancy
How can fully paid up shares be forfeited? Please refer the image and reply
Answers (2)
The main reason for forfeiture is where a call payment has been requested by the company on unpaid (or partly paid) shares and the shareholder has failed to pay the amount due. However, there are other reasons to forfeit including: 1. Fully paid shares being issued on the guarantee that the recipient remains employed by the company for a set amount of time.(sweat equity shares/ESOPs) 2 .Fully paid shares that are subject to a restriction on the sale or transfer for a set amount of time. For this to be able to happen, the Articles of Association must have the specific scenario in them and set out the required procedures.
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