Practicing Success
Forfeiture of shares results in the reduction of which of the following? |
Paid up capital Authorised capital Reserve Capital None of the above |
Paid up capital |
When shares are forfeited, the shareholders lose the ownership rights associated with those shares, and the amount already paid by them (paid up amount) is typically forfeited by the company. As a result, the paid up capital of the company decreases, reflecting the reduction in the company's issued capital due to the forfeiture of shares. |