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Disclosure of Share Capital

State, whethe...

Question

State, whether the following statements are True or False.

A public company forfeits share on non-payment of final call only.

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Solution

False

Explanation: A company can forfeit the shares of a shareholder if he fails to pay any instalment due from him to the company. A company is required to issue a clear 14 days’ notice to the defaulting shareholder asking him to pay the due amount on his shares, failing which, his shares are forfeited.

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A ‘share’ represents ownership of the company whereas a debenture is only acknowledgement of debt. State true or false.

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