Issue of Shares — Secretarial Practice STD 12 Commerce / Arts — Question
Maharashtra BoardEnglish MediumSTD 12 Commerce / ArtsSecretarial PracticeIssue of Shares4 Marks
Question
Board of directors has the authority to forfeit shares.
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Answer
Forfeiture of shares is a process where the company forfeits the shares of a member or shareholder who fails to pay a call on shares. The forfeiture of a share is a forceful activity performed by a company due to non-payment of calls by shareholders.
Only the Board of directors can forfeit the shares if the process of forfeiture is authorised by the Articles of Association.
Board of directors can forfeit shares only in the interest of the company.
A 14 days of notice should be sent to a concerned member.
Thus Board of directors can make forfeiture of shares.
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