Urgent- Can any one provide me procedure of Forfeiture of Shares with recent case laws

[Rekha Chandra]

Dear all,

 

I need procedure for forfeiture of shares.  and if we wish to sell shares forfeited for non payment of calls and recent case laws regarding that
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Thanks & Regard's

Rekha Chandra

[chakri hegde]

Dear Rekha,

The authority to forfeit shares is given to the Board of Directors in Articles of Association of the company.

To be simple, the procedure for forfeiture of shares can be understood as under:

·         The Board of Directors has to give at least 14 days notice to the defaulting members calling upon them to pay outstanding amount with or without interest as the case may be before the specified date.

 

·         The notice must also state that if the shareholders fail to remit the amount mentioned therein within the stipulated period, their shares will be forfeited.

 

·         If they still fail to pay the amount within the specified period of time, the Board of Directors of the company may decide to forfeit such shares by passing a resolution.

 

·         The decision regarding the forfeiture of shares should be communicated to the concerned allottees and should be asked to return the allotment letters and share certificates of the forfeited shares to the company.

For more information you can refer the Secretarial Standard on Forfeiture of Shares (SS-9) issued by ICSI.

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With Best Wishes
Chakri G Hegde
Nissin Foods India Ltd.
Bangalore

[Jayashree Chandrasekaran]

You will have to send notice to the share -holders....first one will be a reminder to the share holders asking them to remit

the balance and the second one should be sent by registered post and should be a last and final reminder to pay the balance.You can wait for

a month after this final reminder,hold a Board meeting and forfeit the shares for which you have not recd the payment.After forfeiting once again send a letter to the concerned share holders informing them that their shares are no longer valid since they have been forfeited.

After this you will have to go in for Re-issue of forfeited shares.

If you are a listed company then the formalities are onerous for re-issue.

Jayashree

On Thu, Nov 12, 2009 at 1:43 PM, Rekha Chandra <csrekha...@gmail.com> wrote:

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