Although the unpaid arr.orrm on tl e shares is a debt due by the holder of the shares to the company the liability for p.tyrae Dt does not arise Imlcss a v alid call is made by the company The amounts or proportions of the face talus of each share payable vith application, Oil a'.lotinent and on call are usually specified in the prospectus Tl.e temls and conditions of payment of calls on shares .rre got erred partly by the Companies Act and partly by the Articles of the cotnpany Calls on shares can be made only by r.l;e Board of Directors throogll resolutions passed at duly coast toted Board meetings It can be Made by the Board at any time dining the life time of the cmupmr., A call call also be made by the liquidator in the course ofthe winding Up of the compar.y-, if the fill amount of the face valu of the shares had no. been called up during the cormir lr..ince of the company,
PROVlSlON REGARDlNG CALLS
Act lays down certain provisions regarding ma of call s on shares. For instance. Sec' 9 i of the Act lays down that a call must be made on a uniform bests on all shares falling under the same class. It means that tilers should be no between shareholders of the same class regarding amount and tmle of pav:ner;t of the call. However, shares of the same nominal value on Chicle different a noirnt3 ha ye been paid up shall ii?; be deemed to fall under the same class
inpames Acl lays down tliat the power to ltake calls on shareholders in respect ofr.loney unpaid on their sliarescan onlybe exercised b the 30:.- i of Directors of he company, bm the power must be exercised by means of resolutions passed at duly constituted meetir zs of the Board flu o. i r to be a valid call. disc call resolution must specify the amount
182 'S: SECRETARIAL PRACTICE
Subject to the above provisiorrs of the Compauies Act, the Articles ,Assoc kabon of a company usually empower the directors to make ca is and lay down the conditions to be observed for ma valid 'calls' on st a. The usual conditions, a given in Regulations
(c) The Board of Directors has the power to revoke or postpone a call after it is made
(d) The joint imlders of a share are Jointly and severally liable for payment of the call money m respect of that share
(e) if the nember concerned fails to pay the call money on or before the stipulated date, he is liable to pavinteres L at 5% per annum, or at such lower rate specified ill the Articles, from the last date of payment to the date of actual payment. The Beard, however, has the power to waive this : rest wholly or in part, if it so desires.
V) If any member desires to pay in advance the money on 'uncalled, the directors may, if they think fit, accept such advance and pay interest on such advance. The rate of interest is IlCt to exceed (% per atmum, tmless the company m general meeting decides otherwise. However, the member ma the advance payment on calls will not be entitled to any votmg right in respec of the amount paid up in advance
(a) A defaulting member will not have anv VOttltg right all the call money due from him is paid. A director has to vacate his of Tics if he fails to pay all money within six months.
PROCEDURE ON MA CALLS