Microlesson · 5-min read

Section 50 - Calls in Advance

# Section 50 — Calls in Advance

## Conditions

If authorised by AOA, the company may accept uncalled amount from any member.
This is called 'call in advance'.

## Rights of Member Paying in Advance

Not entitled to voting rights on such advance amount.
Not entitled to dividend on such advance amount.
If AOA allows, the member may receive interest on the advance.

Worked example

### Example 1

Example: Mr. X pays ₹50,000 to the company as call in advance on his partly paid shares. Can he claim voting rights on this amount?

Answer: No. As per Section 50, the member is not entitled to voting rights on the advance amount, even though interest may be paid (if AOA allows).

⚠️ Common exam mistakes

Assuming members can vote on the advance amount paid.
Forgetting that interest is payable only if AOA permits.
Treating calls in advance as dividend-bearing capital.

Bare-Act text Section 50 · Companies Act, 2013 · click to expand

Section 50 of the Companies Act, 2013 — Company to accept unpaid share capital, although not called up.

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Section 49 - Calls on Shares o

Section 51 - Dividend in Propo

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