Arrange the following steps in correct order.

(A) Calls in Arrears
(B) Reissue of shares
(C) Making calls
(D) Gain on Reissue transferred to Capital Reserve
(E) Forfeiture of shares

Choose the correct answer from the options given below.

(C), (A), (E), (B), (D)

The correct answer is Option (1) - (C), (A), (E), (B), (D).

Making Calls: Calls are important for making shares fully paid-up and for collecting the full amount of shares from shareholders. After shares are allotted, a company can make calls. If shares are not fully called up by the time allotment is complete, the directors can ask for the remaining amount on shares whenever they decide to do so. It is also possible that the timing of call payments by shareholders is determined at the time of share issue and is given in the prospectus.

* Calls in arrear- If shareholders fail to pay the call amount, the outstanding or unpaid calls become known as "calls in arrears." As per Companies Act, 2013, the maximum rate of interest on calls in advance is 12%p.a. As per Companies Act, 2013, the maximum rate of interest on calls in arrears is 10% p.a.

* Forfeiture of shares: If the calls in arrears are not paid within the stipulated time, the company may decide to forfeit the shares of the defaulting shareholders. The company typically issues a notice to shareholders to inform them about payment otherwise there shares will be forfeited. Forfeiture involves canceling the shares and removing the shareholder's rights.

* Reissue of shares : After the forfeiture of shares, the company has the option to reissue these forfeited shares to new shareholders. This process helps the company recover the value of the unpaid calls.

* Gain on Reissue transferred to Capital Reserve- The directors can either cancel or re-issue the forfeited shares. In most cases, they reissue such shares which may be at par, at premium or at a discount. Forfeited shares may be reissued as fully paid at a par, premium, discount. In this context, it may be noted that the amount of discount allowed cannot exceed the amount that had been received on forfeited shares at the time of initial issue, and that the discount allowed on reissue of forfeited shares should be debited to the ‘Forfeited Share Account’. The balance, if any, left in the Share-Forfeited Account relating to reissued Shares, should be treated as capital profit and transferred to Capital Reserve Account.