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Companies Act, 2013

Procedure for Making Calls on Shares

Khushboo Sharma Khushboo Sharma
Khushboo Sharma

Published on: Jul 13, 2023

Darshi Dave
Darshi Dave

Updated on: Jul 13, 2023

(22 Rating)


A Call can be defined as a demand made by the company on its shareholders to pay the whole or part of the unpaid amount on shares held by them within a specified time. Amount remaining after application and allotment money is known as Call. Such Calls can be made by the company, either in lump sum or in parts by way of first, second call and final call.

Applicable Provisions:

  1. Section 49, 50, 173 & 179 of the Companies Act, 2013
  2. Rule 20 of the Companies Incorporations Rules 2014
  3. Rule 4 of the Companies (Share Capital and Debentures) Rules, 2014
  4. Regulation 30 & 46 of the SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015

Mandatory Requirements:

  1. Authorization by the Articles of Association (AOA) to make Calls on the amount remaining unpaid on the Shares held by the respective shareholders
  2. Seeking approval of the Board of Directors by passing a resolution in a duly convened Board Meeting
  3. Calls shall be made on uniform basis on the same class of shares on which same amounts have been paid.


  1. In case, calls are made on the shares of a class for further issue of share capital, such calls shall be made on a uniform basis on all the shares falling under that class.
  2. In case of shares which are of the same nominal value but on which different amounts have been paid-up, such shares shall not be deemed to fall under the same class.
  3. The calls should be made in accordance with the provisions of the Articles and if not, then such calls will be invalid.
  4. If any member intends to pay the call money beforehand, the company may, if so, authorized by its Articles of Association, accept the whole or part of the amount remaining unpaid even if such amount has not been called up. The amount so received is termed as Payment in Advance of Calls and on such Calls in Advance, company may pay interest as may be prescribed.


  1. Convene a Meeting of Board of Directors to Approve the Calling of Unpaid Amount on Shares [As per section 173 & SS-1]:
    The company shall pass a Board Resolution in a duly convened board meeting, to approve and authorize the following:
    • Approving the amount to be called on each share
    • Approving the draft call letter
    • Time, date and place of making the payment on calls
    • Date and period of closure of the books
    • Company Secretary or such other officer/ Director to sign and authorize necessary documents and take such necessary actions to give effect to the decision of the Board.
    Please refer to the Procedure for Conducting Board Meeting for further details.
    Note:In case the Articles of Association (AOA) does not contain provisions for calling whole or any part thereof of the remaining unpaid amount on the shares by any shareholder even if no part is called, then the Company shall pass a Board Resolution to this effect for alteration of Articles of Association (AOA) as well.
    Refer to the Procedure for Alteration of Articles of Association for the detailed procedure.
  2. Filing Form MGT-14 with ROC:
    The company shall file the copy of Board Resolution passed in its duly convened Board meeting in Form MGT-14 within 30 days of passing such resolution along with the requisite documents and fees, with the Registrar of Companies (ROC).
  3. Preparation of List of Members for Making Calls and Closure of Register of Members and Share Transfer Book:
    • The company shall prepare a list for making calls on shares which mentions therein the name, addresses, amount to be called up and contact details of the shareholders to whom call letter is to be sent
    • Also, the share transfer book and register of members shall be closed for a period of 15 days.
  4. Issue Call Letter to the Shareholders and Open Separate Bank Account:
    • The Company shall issue call letter to all the shareholders of the same class with details of time, date, place and mode of payment therein.
    • The Company shall open a Separate Bank Account in a Scheduled Bank for holding the monies received on the calls.
    If a member fails to pay the call money, then he would liable to pay interest not exceeding the rate specified in the Articles or as per the terms of the issue and a Board Resolution is to be passed for forfeiting such shares. The directors reserve the right to waive the payment of interest.
  5. Making Entries in Various Registers:
    On completion of the process of calling of unpaid amount on shares held by the shareholders and upon receiving the same, the company shall make the necessary entries in various registers maintained for this purpose and endorsements on the share certificates shall also be made.

NOTE: The following key points shall be ensured pertaining to making calls on remaining unpaid amount of shares:

  • Call money should not exceed 50% of the face value of the shares at any point of time
  • Once the call is made, the Board of Directors has the power to revoke or postpone such a call
  • Joint shareholders shall be jointly and severally liable for the payment of calls
  • There shall be at least 30 days interval between two successive calls made on remaining unpaid amount of shares
  • Any defaulting member will not have any voting right until he pays the call money due from him.

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