Question

What is meant by “forfeiture of shares”? How are the shares forfeited and reissued? Give example.

Answer 1

Answer:

i) Forfeiture of shares is referred to as the situation when the allotted shares are cancelled by the issuing company due to non-payment of the subscription amount as requested by the issuing company from the shareholder. ... Their share will be forfeited, which means that the shareholder's share will be cancelled.

ii) A, a shareholder having 1000 shares fails to pay the allotment and call money until the due date of payment. Consequently, the company forfeits his shares. Later, it re-issues these shares to B for ₹11 per share fully paid up.