Arrange the following in correct order for issue of shares- (A) Share…

Arrange the following in correct order for issue of shares-

(A) Share forfeiture
(B) Share Application
(C) Share Allotment
(D) Unpaid Call

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → (B), (C), (D), (A)

A company collects the amount on its shares in instalments, and forfeiture can come only after a shareholder has failed to pay an instalment.

(B) Share Application — The first instalment comes with the application (application money).

(C) Share Allotment — Shares are then allotted and the allotment money becomes due.

(D) Unpaid Call — The rest is called up in calls; money not paid on a call remains unpaid (calls in arrears).

(A) Share forfeiture — Only when a shareholder fails to pay allotment or call money can the company forfeit his shares.

NCERT (2026-27 edition):
Issue of Shares – “A salient characteristic of the capital of a company is that the amount on its shares can be gradually collected in easy instalments spread over a period of time depending upon its growing financial requirement. The first instalment is collected along with application and is thus, known as application money, the second on allotment (termed as allotment money), and the remaining instalments are termed as first call, second call and so on.”

NCERT (2026-27 edition):
Forfeiture of Shares – “It may happen that some shareholders fail to pay one or more instalments, viz. allotment money and/or call money. In such circumstances, the company can forfeit their shares, i.e. cancel their allotment and treat the amount already received thereon as forfeited to the company within the framework of the provisions in its articles.”