Describe the provisions of law relating to ‘Calls-in-Arrears’ and ‘Calls-in-Advance’.
Calls-in-Arrears : The portion of called up capital which is not paid by the shareholder within a specified time is known as calls-in-arrears. In other words, when a shareholder fails to pay the amount due on allotment or any subsequent calls, then it is termed as call-in-arrears.
The company is authorised by its Article of Association to charge interest at a specified rate on the amount of call-in-arrears from the due date till the date of payment. If not authorised in the Articles of Association then the company may charge interest at 10% p.a. acccording to Table F of the Companies Act, 2013.
It is deducted from the called-up share capital on the liabilities side of the Company's Balance Sheet. The company can also forfeit the shares on account of non-payment of the calls money after giving proper notice to shareholders. Calls-in-Advance : It means calls not due but paid by the shareholder in advance. Thus, the amount of future calls is received in advance by the company.
In other words, when a shareholder pays the whole amount or a part of the amount in advance, i.e., before the company calls, then it is termed as calls in advance. The company is authorised by its Article of Association to pay interest at the specified rate on calls-in-advance from the date of payment till the date of call made. If the Article of Association is silent in this regard, then the Table F of Companies Act, 2013 shall be applicable that is, interest at 12% p.a. is provided.
It is shown under the heading of current liabilities on the liabilities side of the Company's Balance Sheet.
The company is authorised by its Article of Association to charge interest at a specified rate on the amount of call-in-arrears from the due date till the date of payment. If not authorised in the Articles of Association then the company may charge interest at 10% p.a. acccording to Table F of the Companies Act, 2013.
It is deducted from the called-up share capital on the liabilities side of the Company's Balance Sheet. The company can also forfeit the shares on account of non-payment of the calls money after giving proper notice to shareholders.
Calls-in-Advance : It means calls not due but paid by the shareholder in advance. Thus, the amount of future calls is received in advance by the company.
In other words, when a shareholder pays the whole amount or a part of the amount in advance, i.e., before the company calls, then it is termed as calls in advance. The company is authorised by its Article of Association to pay interest at the specified rate on calls-in-advance from the date of payment till the date of call made. If the Article of Association is silent in this regard, then the Table F of Companies Act, 2013 shall be applicable that is, interest at 12% p.a. is provided.
It is shown under the heading of current liabilities on the liabilities side of the Company's Balance Sheet.
