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easyMCQCUET Accountancy 2025 30 May Shift 12026Accountancy
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Which of the following is the correct statement in respect of Forfeited Shares:

  1. A
    These shares can only be re-issued at a premium.
  2. B
    These shares can only be re-issued at par.
  3. C
    These shares can only be re-issued at a discount.
  4. D
    These shares can either be cancelled or can be re-issued.

Solution & Step-by-step Explanation

According to the provisions of the Companies Act, when shares are forfeited due to non-payment of call money, the company has the legal right to either cancel these shares or re-issue them to another person. They can be re-issued at par, premium, or discount, provided the discount allowed on re-issue does not exceed the amount already received on those shares. Therefore, the statement that they can either be cancelled or re-issued is correct.

Practice this question

Try it yourself before checking the explanation above.

Which of the following is the correct statement in respect of Forfeited Shares:
A
These shares can only be re-issued at a premium.
B
These shares can only be re-issued at par.
C
These shares can only be re-issued at a discount.
D
These shares can either be cancelled or can be re-issued.

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Company AccountsShare CapitalForfeited Shares

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