Calls Paid in Advance

A company, if permitted by the articles, may accept from members, either the whole or part of the amount remaining unpaid on any shares held by him as calls in advance; but the amount so received cannot be treated as a part of the capital for the purpose of any voting rights until the same becomes presently payable and duly appropriated. A company, if so authorised by its Articles, may pay dividend in proportion to the amount paid upon each share, where a larger amount is paid up on some shares than that on other (Section 93). It may be noted that Clause 88(2) of Table A does not permit calls in advance being treated as amounts paid up on shares for the purpose of payment of dividends. Unless the company exercises the right as aforementioned, the shareholders who have paid calls in advance would be entitled to receive interest at the rate specified in the Articles. The interest on calls in advance, though chargeable against profits, also can be paid out of capital when profits are not available for such a payment. In the event of a winding up, calls in advance repayable alongwith interest accrued thereon before any part of the capital is returned to shareholders.