Forfeiture of shares means cancellation of shares and seizure of the amount already received from defaulting shareholders. (i) Forfeiture of Shares Originally Issued at Par. Share Capital A/c Dr (Called-up money) To Forfeited Shares A/c (Paid-up money)
Forfeiture of shares is a process where the company forfeits the shares of a member or shareholder who fails to pay the call on shares or instalments of the issue price of his shares within a certain period of time after they fall due.
What do you mean by forfeiture?
Forfeiture is the loss of any property without compensation as a result of defaulting on contractual obligations, or as a penalty for illegal conduct. … When mandated by law, as a punishment for illegal activity or prohibited activities, forfeiture proceedings may be either criminal or civil.
1. When Forfeiture of shares Issued at Par. … The company debits the Share Capital Account with the amount called-up up to the date of forfeiture on shares. It credits the Shares Allotment Amount or Shares Call Account with amount called-up on forfeited shares but due from the shareholders.
– The liability of a person whose shares have been forfeited comes to an end when the company receives the payment in full of all such money in respect of shares forfeited. – A member is liable for unpaid calls even after the forfeiture of shares.
Forfeiture is withdrawal of shares due to non-payment of any call by the shareholder or for any other ground as may be provided in the Articles. On forfeiture of shares the member loses the amount paid thereon and his interest in the ownership of the shares.
2) Share Forfeiture, Capital Reserve and Securities premium, all are nominal accounts as they represent loss and gain to the business concern.
How do you speak forfeiture?
Here are 4 tips that should help you perfect your pronunciation of ‘forfeiture’:
- Break ‘forfeiture’ down into sounds: [FAW] + [FI] + [CHUH] – say it out loud and exaggerate the sounds until you can consistently produce them.
- Record yourself saying ‘forfeiture’ in full sentences, then watch yourself and listen.
What are forfeiture proceedings?
The process of forfeiture often involves proceedings in the court of law. Civil proceedings occur when the action is against property, as opposed to a person. … If the defendant is found guilty during criminal proceedings, criminal forfeiture allows for their property, money or substitute assets to be confiscated.
What is forfeited amount?
In case the transfer of assets is done within the agreement between seller & buyer, then will the advance money taken by seller in previous FY be termed as forfeited amount.
What Is a Forfeited Share? … For example, a forfeiture may occur if a shareholder fails to pay an owed allotment (call money), or if he sells or transfers his shares during a restricted period.
The share forfeited A/c is shown in the liabilities side in Balance Sheet under the heading ‘share capital’. It is added to paid up capital until all the forfeited shares are not re-issued.