Surya Limited invited applications for 15,000 shares for ₹10 each at a premium of 20% per share. The amount was payable as under:
On application ₹4 On allotment ₹6
On first call ₹1 On final call-Balance
Applications were received for 36,000 shares and pro-rata allotment was made to all the applicants. Directors have not made the final call. Mr. Ritesh, the holder of 300 shares, did not pay anything after application money. Directors forfeited these shares and re-issued them at ₹6 per share.
On the basis of following case, answer the Question.
Before forfeiture of shares of Mr. Ritesh Directors must have issued a notice for _________.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → 14 days
Shares can be forfeited only by following the procedure in the Articles, which is normally based on Table F of the Companies Act, 2013 (the book’s box on calls still names it Table A, from the old Act; the 14-day rule is the same). Under it, the directors must first serve a notice on the defaulting shareholder giving at least 14 days to pay the unpaid call money, and warning that the shares will be forfeited if the money is not paid. Only after this notice period runs out can the shares of Mr. Ritesh be forfeited.
NCERT (2026-27 edition): NCERT (2026-27 edition):
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