What is the nature of forfeiture of shares account??? and in what all manner can it be utilised??? specifically, can it be used to issue bonus shares???
Thanks in advance
Nitin Gupta
CA Shree Jain
(Chartered Accountant)
(1572 Points)
Replied 27 May 2010
Forfeiture of Shares:
Forfeiture of shares means cancellation of membership of a shareholder due to non payment of calls made by the company. Forfeiture of shares amount to :
– Cancellation of the membership of the defaulting shareholder and
– Reduction of share capital of the company.
(i) Shares issued at par
(ii) Shares issued at premium
(a) Premium received in full
(b) Premium due but not yet received
(iii) Shares issued at discount
· In all cases share capital is debited by the called up amount on forfeited shares
· Shares forfeited A/c is credited by the amount received (excluding the amount of premium) on forfeited shares.
· Securities premium A/c will not get affected if premium on forfeited shares has been received but it will be debited if it is due but not received
· Shares issued at a discount when forfeited discount on issue of shares will always be credited by the amount of discount allowed on forfeited shares:
Nitin Grover
(CS)
(1228 Points)
Replied 28 May 2010
pankaj kumar
(studying )
(186 Points)
Replied 24 November 2010
Guys nitin is asking the nature of "share forfeiture account"............plz i also need its answer plz rply....
CA Prakash Rai
(CA)
(129 Points)
Replied 10 December 2010
| Originally posted by : Nitin Grover | ||
 |
Dear Nitin Yes it can be used for issuing of Bonus Share. further it can be used as paying premium on redemption, debenture, etc Regards |
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plz quote relevant section and cases if possible.
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