Question

What is meant by Calls-in-Arrears?

Answer 1

Calls-in-Arrears refers to the amount of money called up by the company from its shareholders that has not been paid by the due date. When a shareholder fails to pay the allotment money or any subsequent call money within the specified time, the unpaid balance is termed as calls-in-arrears. This outstanding amount is a debt owed by the shareholder to the company, and until it is paid, the company has the legal right to charge interest on it or even forfeit the shares if it remains unpaid for an extended period.