Calls on shares: When shares are issued, the terms of issue may specify that installment by which the issue price shall be payable. Installment other than those payable by way of application and allotment money are generally referred to as calls. A call, in the strict sense, is a demand by the company for payment of part of the issue price of shares or debenture which has not been paid, and the date on which payment was made was not specified in the terms of the issue.
Requisites of a valid call:
In making a call, care must be taken that:
- Resolution at a meeting of the board [section 292(1)(a)]
(i) The directors making it are duly appointed and duly qualified;
(ii) The meeting of the Board of directors has been duly convened;
(iii) The proper quorum is present;
(iv) The resolution making the call is duly passed and specifies the amount of the call, and the time and place of payment;
(v) A proper entry is made in the minutes.
- Calls on shares of same class must be made on uniform basis [section 91]: For the purpose of this section, shares of the same nominal value on which different amounts have been paid up shall not be deemed to fall under the same class.
- Call to be made bona fide in the interest of the company: The amount called up has to be used for the benefit of the company, and it should also be called only in the interest of the company.
- Time within which shares are to be made fully paid up: Any company offering shares to the public must ensure that the shares issued are made fully paid up within 12 months of the date of allotment, where the size of the issue is upto Rs. 500 crores, the amount to be called up on application, allotment and on various calls should not in each case exceed 25% of the total quantum of issue.
- Notice of call: A call must be made serving members a notice of payment is accordance with the provisions of section 53. It should be a formal notice and not mere a demand or request for payment. It must specify the exact amount and time of payment.