Question

India Ltd. invited applications for issuing 3,00,000 equity shares of ₹10 each at a premium of ₹30 per share. The amount was payable as follows: On Applications ₹7 per share (including ₹5 premium) On Allotment ₹10 per share (including ₹7 premium) On First Call ₹11 per share (including ₹8 premium) On Second and Final Call Balance Amount A shareholder holding 2,000 shares did not pay the first call and second and final call money and his shares were forfeited after the final call.

Liability of a shareholder is limited to ______ of the shares allotted to him.

Options

• Face Value

• Called up value

• Paid up value

• Uncalled up value

Answer 1

Liability of a shareholder is limited to Face Value of the shares allotted to him.

Explanation:

Total Capital = ₹2 (App) + ₹3 (Allotment) + ₹3 (1st Call) + ₹2 (2nd Call) = ₹10

Face Value = ₹10

hareholder paid only Application + Allotment = ₹5 capital (out of ₹10)

Liability of a shareholder is limited to the face value of the shares allotted to him.