# Calls on Shares and Related Matters

## Why This Matters

When shares are issued partly paid, the company recovers the balance through calls. The Act ensures calls are made fairly (uniformly) and handles practical situations like advance payment and dividend distribution on partly paid shares.

## 1. Introduction to Calls [Sec 49]

Call: The mechanism through which the company enforces a shareholder's liability to pay the full value of partly paid-up shares.
Section 10(2): All money payable by a shareholder under the MOA/AOA is a debt owed to the company.
Liability arises only after a valid call is made — there is no automatic obligation to pay unpaid share money before that.

### Related Sections at a Glance

Section	Subject
49	Principle of uniformity for calls
50	Calls in advance
51	Dividend on paid-up amounts

## 2. Uniformity of Calls (Sec 49)

Calls must be made on a uniform basis for all holders of a given class of securities.
Shares of the same nominal value but with different paid-up amounts are NOT considered the same class for uniform calls.
A shareholder may pay only a part of the call amount due — the company is obligated to accept whatever is tendered.

## 3. Calls in Advance (Sec 50)

If authorised by the AOA, a company may accept advance payment of unpaid amounts on shares — even before they are called.
No voting rights attach to amounts paid in advance until the amount is officially called up.
Interest may be paid on calls in advance at a rate fixed by the AOA.

## 4. Proportionate Dividend (Sec 51)

Dividend may be paid proportionately based on paid-up capital, including calls in advance — subject to AOA.
If all equity shares are not equally paid-up, the Board may decide to pay dividend on a pro rata basis.
Preference share dividend is always paid at a fixed rate, irrespective of paid-up status.

## Memory Hook

49 → Uniform: same class, same call
50 → Advance: pay early, but no vote until called
51 → Proportional: dividend follows paid-up amount

Worked example

### Example 1

Example 1: A company has issued 10,000 equity shares of ₹10 each. On Set A (5,000 shares), ₹6 is paid up; on Set B (5,000 shares), ₹8 is paid up. The Board makes a uniform call of ₹2.

Answer: Calls must be uniform within the same class. However, since the two sets have different paid-up amounts, they are treated as different classes for the purpose of uniformity. The call need not be the same number across them.

### Example 2

Example 2: Mr X pays ₹5,000 in advance against an uncalled portion of his shares. Can he exercise voting rights on this amount?

Answer: No. Calls in advance do not confer voting rights until the amount is officially called up. The company may, however, pay him interest on the advance as per the AOA.

⚠️ Common exam mistakes

Believing that calls in advance carry voting rights from the moment of payment — they don't, until the call is officially made.
Treating all shares of the same nominal value as one class for uniform calls — different paid-up amounts make them different classes.
Forgetting that preference dividend is fixed and is not affected by partly paid-up status.

Bare-Act text Sections 49, 50, 51 · Companies Act, 2013 · click to expand

Section 49 — Calls on shares of same class to be made on uniform basis: Where any calls for further share capital are made on the shares of a class, such calls shall be made on a uniform basis on all shares falling under that class. Section 50 — Company to accept unpaid share capital, although not called up. Section 51 — Payment of dividend in proportion to amount paid-up.

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Calls and Incidental Matters (Sec 49, 50, 51)

Worked example

⚠️ Common exam mistakes