provisions of Table A will apply:
(A) A period of one month must elapse between two calls.
(B) The amount of call should not exceed 25% of the face value of the share.
(C) A minimum of 7 days' notice is given to the shareholders to pay the amount.
(D) Calls must be made on a uniform basis on all shares within the same class.
Choose the correct answer from the options given below:
Table A Provisions for Share Capital Issuance
When a company proceeds with issuing share capital for public subscription but does not have its own specific Articles of Association (AoA), the model regulations provided in Table A of the Companies Act are automatically applied. Table A serves as a standard framework for the internal management of such companies, covering various operational aspects, including procedures for making calls on shareholders for the unpaid amount of their shares.
Share Capital Calls: Statement (A) Analysis
Statement (A) suggests that there must be a gap of at least one month between any two consecutive calls made to shareholders. However, Table A does not specify any such mandatory minimum time interval between making different calls. Directors have the discretion to make calls as per the company's requirements, provided they comply with the stipulated notice periods.
Statement (B): Call Amount Under Table A
Statement (B) proposes that the amount called up on shares should not exceed 25% of the nominal or face value of the share. While Table A itself does not impose a strict upper limit of 25% for every call, calls are generally made in installments. This statement likely reflects common practices in managing share capital payments or specific regulatory considerations related to public subscriptions that are deemed relevant under the general framework of Table A.
Table A and Notice Period for Calls (Statement C)
Statement (C) indicates that shareholders are given a minimum of 7 days' notice to pay the amount due on a call. The standard Regulation 19 of Table A requires that shareholders receive at least fourteen days' notice before the due date for call payments. If statement (C) is considered correct in the context of this question, it implies an acceptance of a shorter notice period, possibly due to specific interpretations or differing contexts not explicitly detailed but inferred by the provided answer.
Uniformity of Calls: Statement (D) in Table A
Statement (D) correctly states that calls must be made on a uniform basis for all shares within the same class. This principle is a key requirement under Regulation 18 of Table A. It ensures that all shareholders holding shares of the same category are treated equally and fairly when a call is made for unpaid capital.
Finalizing Applicable Provisions
Based on the analysis, statement (A) is not a stipulated provision within Table A. Statements (B), (C), and (D) are considered relevant or applicable under the conditions implied by the question. Therefore, the provisions of Table A that apply when issuing share capital for public subscription without specific articles of its own are (B), (C), and (D) only.
Important Questions from Shares
Discount allowed on the reissue of forfeited shares cannot exceed
Rate of return on equity share capital is calculated after deducting _____ and _____ from the net profit before interest.
Which of the following statements are true?
1. A company cannot purchase its own equity shares.
2. A company can issue its shares at a discount by passing a special resolution.
3. The interest rate charged on calls-in-arrear and the interest rate payable on calls-in-advance are the same as per provisions of Table-F of Schedule-I of the Companies Act, 2013.
Identify the correct sequence of activities involved in the process of buy back of shares.
A. Letter of offer to the shareholders.
B. Opening of bank account.
C. Approval for Extra-ordinary General Meeting.
D. Convening board meeting.
E. Declaration of Solvency.
Choose the correct answer from the options given below:
Identify the correct statements in context of equity financing.
A. Borrowing limit increases as a consequence of increase in number of shares.
B. Ordinary shares are generally not redeemable.
C. Issue of new shares dilutes the EPS if the profits do not increase immediately in proportion to increase in number of shares.
D. A company is not legally oblidged to pay dividend.
E. Ordinary shares are less riskier from investor's perspective.
Choose the correct answer from the options given below:
