While issuing the share capital for public subscription where there is no articles of association of its own, the following provisions of Table A will apply:
(A) A period of one month must elapse between two calls.
(B) The amount of call should not exceed 25% of the face value of the share.
(C) A minimum of 7 days' notice is qiven to the shareholders to pay the amount.
(D) Calls must be made on a uniform basis on all shares within the same class.
Choose the correct answer from the options given below:
Correct Answer :
(A), (B), (C) and (D)
Solution :
The correct answer is (A), (B), (C) and (D).
Explanation:
When a public company limited by shares does not register its own Articles of Association (AoA), the model regulations contained in Table A of the Companies Act automatically apply to guide its internal administration, including the regulations for making calls on shares.
The reasoning behind each of the listed provisions under Table A is as follows:
(A) Period between two calls: Table A specifies that a period of at least one month must elapse between two successive calls. This is designed to give shareholders a reasonable amount of time to arrange funds before the next payment is due.
(B) Limit on call amount: The amount called up at any single time must not exceed 25% (one-fourth) of the nominal or face value of the share. This prevents the company from demanding excessively large payments from shareholders all at once.
(C) Notice to shareholders: A notice of payment must be served to the shareholders, providing them with a specified minimum period to pay the call amount, ensuring transparency and standard administrative compliance.
(D) Calls on a uniform basis: To ensure equity and prevent discrimination among members, calls must be made on a uniform basis on all shares within the same class. The company cannot selectively call up money from only a few shareholders of a class while leaving others unpaid.
Since all these statements describe the regulatory framework governing share calls under Table A, they are all applicable. Therefore, the combination of all four provisions is correct.
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