Forfeiture of shares refers to the situation where the allotment of shares is cancelled for the shareholders due to non-payment of any installments. In contrast to that, surrender of shares takes place when shareholders return the shares to the company for cancellation.
Surrender of shares means Voluntary return of shares by a member to the company. … Surrender of shares The directors may accept a surrender of shares by way of compromise of a claim.
Surrender of shares means voluntary return of shares by a member to the company. It is a short cut to the long procedure of forfeiture of shares. Shares, which are liable to be forfeited on account of default in the payment of calls, may be surrendered by the holder if he so desires.
Often, in a formal or informal recapitali- zation, shareholders will surrender their stock in order to strengthen the financial picture of the corporation, to induce outside persons to invest in the corporation, or to allow a key employee to acquire stock in the corporation.
The Capital Reduction Account is a temporary account opened in order to carry out the internal reconstruction. When the scheme is carried out, the account is closed. The Capital Reduction Account represents the sacrifice made by the Shareholders, Debenture-holders, Creditors etc.
What is difference between interim and final dividend?
Interim dividend is declared when the company makes good profit in the first half of the financial year. I.e. declared before the end of the financial year. Final dividend is declared at the completion of financial year in Annual General Meeting of the company.
The transfer of shares is a voluntary act by the holder of shares and takes place by way of contract. Whereas, the transmission of shares takes place due to the operation of law that is on the death of the holder of shares or in an event where the holder becomes insolvent/lunatic.
Share is the capital of the company, but Debenture is the debt of the company. The shares represent ownership of the shareholders in the company. On the other hand, debentures represent indebtedness of the company. The income earned on shares is the dividend, but the income earned on debentures is interest.
Surrender of shares is a short cut procedure in order to avoid the forfeiture of shares. Shares that have the possibility of being forfeited due to defaulting in payment can be voluntarily surrendered by the shareholders.
Difference between Forfeiture and Surrender of Shares.
|Forfeiture of Shares||Surrender of Shares|
What is called the difference between subscribed capital and called up capital?
Uncalled capital is the difference between the subscribed capital and the capital which has been called. … Option a: The portion of the money paid by shareholders on the called-up capital is known as paid-up capital.
It is important to note that the company can buy-back equity as well as preference shares. It is not necessary that preference shares must always be redeemed as they can also be the subject of a buy-back of shares.