A public company forfeits share on non-payment of final call only.

Question

State, whether the following statements is True or False. 

A public company forfeits share on non-payment of final call only. 

Options 

• True 
• False

Answer 1

False 

Explanation: A company can forfeit the shares of a shareholder if he fails to pay any instalment due from him to the company. A company is required to issue a clear 14 days’ notice to the defaulting shareholder asking him to pay the due amount on his shares, failing which, his shares are forfeited.