Question

Which of the following security can be forfeited for non-payment of call?

• A. Shares.
• B. Debentures.
• C. Bonds.
• D. Any of the above.

Answer 1

Answer: (A)

Shares.

Debentures & Bonds are in the nature of loan provided to a company and usually have a high face value and periodic payment of interest to the debenture holders & bond holders. So it is highly unlikely that there is a default of payment of money by denture holders & bond holders.

But default in payment of call money is quite a common event in case of shares. Hence this is the reason that shares can be forfeited for non-payment of call & not debenture & bonds.