In the balance sheet of a company, calls in arrears are appearing for the past 10 years. Now the company wants to remove Calls in arrear from the balance sheet.
Pls advise the procedure to be followed by the company to forfeit calls in arrears
10 February 2010
Check out why it has remained in arrears for so long before forfeiting the shares. Was any dividend paid during any year on those shares? The procedure is subject to what is stated in the Articles of Assn of the company in this regard, u have not stated whether its a listed co / pvt ltd co / closely held ltd unlisted co.
Pls advice forfeitutre of calls in arrears is governed by which section of the Companies Act, 1956 or any other law and what would be the accounting treatment in such case.
10 February 2010
Pl c sec108 of Cos Act '56, since the shares r listed follow SEBI guidelines also.Notice to the parties is important as any short comming in the issue of notice can invalidate a forfeiture
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