Calls on Shares :
A ‘call’ may be defined as a demand made by a company on its shareholders to pay the whole or a part of the balance, remaining unpaid on each share at any time during the continuance of a company
According to section 49 of the Companies Act, 2013, where any calls for further share capital are made on the shares of a class, such calls shall be made on a uniform basis on all shares falling under that class. Here the shares of the same nominal value on which different amounts have been paid-up shall not be deemed to fall under the same class.
Where as section 50 of the Companies Act, 2013 says that a company may, if so authorised by its articles, accept from any member, the whole or a part of the amount remaining unpaid on any shares held by him, even if no part of that amount has been called up.
In the case of a member of the company limited by shares, he shall not be entitled to any voting rights in respect of the amount paid by him until that amount has been called up.
(a) Rules for making calls: The Board of Directors alone is empowered to make a call. The power cannot be delegated to a director or to a committee of directors or to any other officer of the company (Section 179 of the Companies Act, 2013). A call on the shares falling under the same class must be made on a uniform basis. Shares of the same nominal value, on which different amounts have been paid up, are not deemed to fall under the ‘same class’ (Section 49). The Board’s resolution making the call must specify the amount of call per share and the time allowed for its payment.
(b) Payment of calls in advance: But before we conclude our discussion on calls we have also to know how payment in advance of calls is treated by a company. A company may, if so authorised by the articles, accept from any member the whole or a part of the amount remaining unpaid of any shares by him although no part of that amount has been called up [Section 50, the Companies Act, 2013]. The amount so received or accepted is described as payment in advance of calls. When a company receives payment in advance of calls, the consequences will be as follows:
(i) The shareholder is not entitled to voting rights in respect of the moneys so paid by him until the same would, but for such payment, become presently payable [Section 50)].
(ii) The shareholder’s liability to the company in respect of the call for which the amount is paid is extinguished.
(iii) The shareholder is entitled to claim interest on the amount of the call to the extent payable according to articles of association. If there are no profits, it must be paid out of capital, because shareholder becomes the creditor of the company in respect of this amount.
(iv) The amount received in advance of calls is not refundable.
(v) In the event of winding up the shareholder ranks after the creditors, but must be paid his amount with interest, if any before the other shareholders are paid off.
(vi) The power to receive the payment in advance of calls must be exercised in the general interest and for the benefit of the company (Syke’s case (1872) L.R. 13 Eq. 255).