Accountant of a company provides the following steps regarding issue…

Accountant of a company provides the following steps regarding issue of shares. Arrange them in proper sequence.

(A) Calls in Arrear

(B) Forfeiture of Shares

(D) Reissue of Shares

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → (C), (A), (B), (D)

Each event can happen only after the one before it, because forfeiture and reissue follow from a shareholder’s failure to pay.

(C) Receipt of Share Application Money — comes first: the issue of shares begins when the public applies and pays the application money.

(A) Calls in Arrear — follows: after allotment and calls, a shareholder who does not pay on the due date creates calls in arrears.

(B) Forfeiture of Shares — comes next: the directors can forfeit shares only for non-payment of the amount called, so the arrears must exist first.

(D) Reissue of Shares — comes last: only shares that have already been forfeited can be reissued.

NCERT (2026-27 edition):
Issue of Shares – “… • Receipt of Applications: When prospectus is issued to the public, prospective investors intending to subscribe the share capital of the company would make an application along with the application money and deposit the same with a scheduled bank as specified in the prospectus.”

NCERT (2026-27 edition):
Calls in Arrears – “It may happen that shareholders do not pay the call amount on due date. When any shareholder fails to pay the amount due on allotment or on any of the calls, such amount is known as ‘Calls in Arrears’/‘Unpaid Calls’.”

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.”

NCERT (2026-27 edition):
Summary – “… Reissue of Shares: The management of a company is vested with the power to reissue the shares once forfeited by it, subject of course, to the terms and conditions in the articles of association relating to the same.”