Hey aspirant, hope you are doing well!

Forfeiture of shares is a really important topic for both class 12th and College exams.

If any shareholder fails to pay the allotment or call money on the shares held by him, the company has an option to forfeit his shares. Forfeiture basically means cancellation of shares on account of default in payment. In such a case, the amount already paid by the shareholder is not refunded and is kept by the company. A 14 days notice must be given to the defaulting shareholder to pay the required amount of money before forfeiting the shares held by him. If even after giving him a notice he doesn't pay the money due then the company has the right to forfeit his shares.

For example- If i have been allotted 500 shares and i paid the money on application but i failed to pay the money on first call and final call. Then the company may forfeit my shares in accordance with the rules and by a resolution by the Board of directors.

Hope it helps you! All the best for your future endeavours!