A call is a demand directors pursuant to a resolution of the board to shareholders with amounts outstanding on their shares to pay the whole or any part of the balance. Calls are necessary if the company‟s issued capital is not fully paid up.
Rules Relating to Making of Calls
1. Calls are necessary if company‟s issued capital is not fully paid up
2. A call may be made during the life of a company or the liquidator in the course of winding up. Under Article 15 of Table A, directors may from time to time make calls upon the members in respect of any monies unpaid on their shares.
3. Under Table A, a call must not exceed a quarter of the nominal value of the shares or be payable in less than one month from the date of the preceding call
4. A shareholder is entitled to at least a 14 day notice to make good the call
5. Under article 16 of Table A, a call is deemed to have been made when the resolution of the board authorizing it is passed.
6. A call may be postponed or revoked in accordance with the wishes of the directors.
7. Under article 17 of table A, joint holders of a share are jointly and severally liable to pay all calls
8. The liability of a call creates a debt due to the company enforceable the company or the liquidator in the course of winding up.
9. If a shareholder fails to pay a cal or installment thereof, his shares are liable to be forfeited
Payment of Calla in Advance
If authorized its articles a company may accept payment from a member of the whole or part of the amount remaining unpaid on his shares though the same has not been called up.
Under Article 21 of table A, “directors” may receive from any member will to advance thesame or any part of the monies uncalled and unpaid upon his shares.
Payment of calls in advance has certain legal consequences:
1. The shareholders liability to the company is extinguished or reduced as the case may be
2. The shareholders becomes a creditor to the company to the extend of the advance
3. The company cannot be compelled to repay the payment
4. The company cannot repay without the consent of the shareholder.