Study the following case/situation and express your opinion.
Red Tubes Ltd. has made a demand on its shareholders to pay the balance unpaid amount of ₹ 20/- per share (having a face value of ₹ 100) held by them. The company has sent letters asking the shareholders to pay the money to its Bankers within the specified time.
- Are the shareholders liable to pay ₹ 20 for the shares held by them?
- Name the letter sent by the company to its shareholders asking them to pay ₹ 20/-
- What happens if a shareholder fails to pay the money within the specified time?
- Yes. The shareholders are liable to pay ₹ 20 for the shares held by them. This is because it is the responsibility of every shareholder to pay the call money as demanded by the company.
- The company has to send the call letter to shareholders for the payment of call money. This letter is sent by ordinary post.
- If a shareholder fails to pay the money within the specified time, then the company sends a warning letter and after that, the company can forfeit (cancel) the shares of the shareholders.