Question

Star Ltd. issued 10,000 shares of ₹ 10 each, payable as ₹ 4 on application, ₹ 3 on allotment, ₹ 2 on first call and balance on second and final call.

500 shares were forfeited. Calculate the 'Maximum Permissible Discount' and 'Minimum Reissue Price' on reissue in each of the following cases, if the reissued shares are fully paid-up:

Case 1. If shares were forfeited for non-payment of Second and Final Call.

Case 2. If shares were forfeited for non-payment of First Call and Second and Final Call.

Case 3. If shares were forfeited for non-payment of Allotment, First Call and Second and Final Call.

Case 4. If shares were forfeited for non-payment of Allotment and First Call. Second and Final Call is not yet made.

Answer 1

Face value per share = ₹ 10

Amount payable:

Application = ₹ 4

Allotment = ₹ 3

First Call = ₹ 2

Second and Final Call:

₹ 10 − (₹ 4 + ₹ 3 + ₹ 2) = ₹ 1

For reissue of forfeited shares:

Maximum Permissible Discount = Amount forfeited per share

Minimum Reissue Price = ₹ 10 − Maximum Permissible Discount

Case 1: Non-payment of Second and Final Call

Amount received:

₹ 4 + ₹ 3 + ₹ 2 = ₹ 9

Maximum Permissible Discount:

₹ 9 per share

Minimum Reissue Price:

₹ 10 − ₹ 9 = ₹ 1 per share

Case 2: Non-payment of First Call and Second and Final Call

Amount received:

₹ 4 + ₹ 3 = ₹ 7

Maximum Permissible Discount:

₹ 7 per share

Minimum Reissue Price:

₹ 10 − ₹ 7 = ₹ 3 per share

Case 3: Non-payment of Allotment, First Call and Second and Final Call

Only application money was received:

₹ 4

Maximum Permissible Discount:

₹ 4 per share

Minimum Reissue Price:

₹ 10 − ₹ 4 = ₹ 6 per share

Case 4: Non-payment of Allotment and First Call; Second and Final Call not yet made

Only application money of ₹ 4 per share was received.

Maximum Permissible Discount:

₹ 4 per share

Minimum Reissue Price:

₹ 10 − ₹ 4 = ₹ 6 per share