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REDEMPTION OF PREFERENCE SHARES

If shares are not fully paid up, company will redeem shares only when it is fully paid up but while forfeiting the shares they cancel it instead of reissuing since the redemption due in near future.......why does the same forfeiting concept does not apply when the shares are not fully paid up??


GOKULA LAKSHMI

GOKULA LAKSHMI

CA Inter

780

18-Mar-21 16:52

22

Answers (2)

Best Answer

It may so happen that company itself has not called up part money and hence, shares are not fully paid up. So, law says all calls must be made up and shares fully paid up before redemption. In case of forfeiture, it's the shareholder's default and hence shares are forfeited and cancelled.


Sahibdeep Singh

Sahibdeep Singh

Moderator

18-Mar-21 17:23

Forfeiting happens when the shares are not paid up fully.


Suraj Lakhotia

Suraj Lakhotia

Admin

18-Mar-21 17:10

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