ALPHA Company Ltd. has made a demand on its shareholders to pay the balance unpaid amount of ₹ 20/- per share (having a face value of ₹ 100/-) held by them. The company has sent letters asking the shareholders to pay the money to its bankers within t…

Answer: (a) Yes (b) Call letter (call notice) (c) A reminder is sent, interest may be charged and finally the shares may be forfeited.

(a) Yes. In a company limited by shares, the liability of a member is limited to the unpaid amount on the shares held. Since ₹ 20 per share remains unpaid, the shareholders are liable to pay it when the company makes a call.

(b) The letter is a call letter (call notice). It states the amount of call, the date of the Board resolution, the last date and the bank where the money is to be paid.

(c) If the shareholder fails to pay within the specified time, the company sends a reminder letter and may charge interest on calls in arrears as per its Articles. If he still does not pay, the company sends a notice of forfeiture giving at least 14 days; on continued default the Board may forfeit the shares, and the amount already paid on them is not refunded.