R.Ltd invited applications for 15,000 shares of ₹10 each at premium of ₹2 per share. The amount was payable as follows:
On Application ₹4
On allotment ₹5
On 1st call ₹2
On final call ₹1
Applications were received for 20,000 shares. The application of 2,000 shares was rejected. Mohan, who applied for 3,000 shares was allotted in full and prorata allotment was made to the remaining applicants. All money was fully received with the exception of the first call and final call on 3,000 shares held by Hari. These shares were forfeited and subsequently re-issued @ ₹8 per share.

On the basis of the above information answer the question.

Interest on calls in advance is allowed according to table F of Companies Act 2013 at the rate of:

12% p.a.

The correct answer is option 2- 12% p.a..

Interest on calls in advance is allowed according to Table F of Companies Act, 2013 at the rate of 12% per annum.

Sometimes shareholders pay a part or the whole of the amount of the calls not yet made. The amount so received from the shareholders is known as “Calls in Advance”. The amount received in advance is a liability of the company and should be credited to ‘Call in Advance Account.” The amount received will be adjusted towards the payment of calls as and when they becomes due.

The balance in ‘Calls in Advance’ account is shown as a separate item under the title Equity and Liabilities in the company’s balance sheet under the head ‘current liabilities’, as sub-head ‘others current liabilities’. It is not added to the amount of paid-up capital. As ‘Calls in Advance’ is a liability of the company, it is under obligation, if provided by the Articles, to pay interest on such amount from the date of its receipt up to the date when appropriate call is due for payment. A stipulation is generally made in the Articles regarding the rate at which interest is payable. However, if Articles are silent on this account, Table F is applicable which provides for interest on calls in advance at a rate not exceeding 12% per annum.