Matching Company Share Capital Rules

This question requires us to match the provisions related to company share capital with the specific values or percentages associated with them. We need to match the items in List-I with the corresponding items in List-II.

Analyzing the Matching Pairs

Let's examine each item in List-I and find its match in List-II based on the provided correct answer:

• (A) Application Money should be at least: This refers to the minimum amount a company must collect from applicants when they apply for shares. The provided matching is (IV).
• (IV) 25% of face value: This is the percentage of the share's face value that must be collected as application money.

So, the first match is A-(IV): Application Money should be at least 25% of face value.

• (B) The interest rate on calls in Arrears: This is the maximum rate of interest a company can charge shareholders who fail to pay call money by the due date. The provided matching is (II).
• (II) 12% p.a.: This is the annual interest rate specified for calls in arrears.

So, the second match is B-(II): The interest rate on calls in Arrears is 12% p.a.

• (C) The interest rate on calls in Advance: This is the maximum rate of interest a company can pay shareholders who pay call money before it is due. The provided matching is (III).
• (III) 10% p.a.: This is the annual interest rate specified for calls in advance.

So, the third match is C-(III): The interest rate on calls in Advance is 10% p.a.

• (D) The amount of calls should not exceed: This refers to the maximum percentage of the face value that can be demanded in a single call. The provided matching is (I).
• (I) 5% of face value: This is the maximum percentage of the face value that a single call amount should not exceed.

So, the fourth match is D-(I): The amount of calls should not exceed 5% of face value.

Summary of Matching

Based on the analysis, the correct matching is:

This gives us the combination A-(IV), B-(II), C-(III), D-(I).

Revision Table: Company Share Capital Provisions

Here is a quick summary of the matched provisions and their associated values:

Additional Information: Calls on Shares

When a company issues shares, it may not require the full face value to be paid immediately. The amount is often collected in installments: application, allotment, and one or more calls.

• Application Money: The amount paid by a person when applying for shares. There's a minimum requirement for this amount, often a percentage of the face value.
• Allotment Money: The amount payable by applicants whose applications have been accepted (shares have been allotted to them).
• Call Money: The remaining amount demanded by the company from shareholders after allotment. This can be collected in one or more installments, known as first call, second call, final call, etc.
• Calls in Arrears: This occurs when a shareholder fails to pay the call money by the specified due date. The company may charge interest on this overdue amount as per its Articles of Association (often referencing Table F or similar model articles).
• Calls in Advance: This occurs when a shareholder voluntarily pays part or all of the remaining amount on shares before the company makes a call for it. The company may pay interest on this amount until the call is due, again, as per its Articles of Association.

The rates of interest for calls in arrears and calls in advance, as well as rules regarding the maximum amount per call and the interval between calls, are typically governed by the company's Articles of Association. If the Articles are silent, the provisions of Table F of the Companies Act usually apply, which specify certain rates and limits. The specific percentages and rates can vary depending on the specific regulations adopted by the company, but the question provides fixed values to match.