Liability on partly paid up shares already forfeited under British Comapnies Act
tapuriah madhu
(Querist) 12 January 2009
This query is : Resolved
One of my client is holding partly paid up shares of a company incorporated in England.The articles of association of the company provides that a shareholder holding partly paid up share shall be liable to the extent of amount remaining unpaid even after the shares have been forfeited by the company due to non payment of call money.Shares in the question have been forfeited by the company due to non payment of call money.
My question is
whether the articles can insist upon the payment even after forfeiture ?
& if yes,whether after payment of full money the shares so forfeited become the property of the original share holder.
Manish Singh
(Expert) 13 January 2009
it depends what the Companies Act of the UK says over the issue.
AoA cant override the provisions of the Act so check the provisions of the British Act.
Jaydeep Kurup
(Expert) 14 January 2009
Check the provisions of the UK Act. However since the Indian Companies Act has been more or less modelled on the lines of the UK Act, we can say that such a provision can be incorpoarted in the Articles. Articles ca insist on payment of call money even after forfeiture. Further after forfeiture, the shares become the property of the Company.
