Section 50 of the Companies Act, 2013
Section 50 of the Companies Act, 2013 deals with the effect of non-payment of calls by shareholders.
📘 Section 50 – Company to Accept Unpaid Share Capital, Although Not Called Up
1. A company may, if so authorized by its articles, accept from any member the whole or a part of the amount remaining unpaid on any shares held by him, although no part of that amount has been called up.
2. A member of the company shall not be entitled to any voting rights in respect of the amount paid by him in advance of calls on any share until that amount has been called up.
📝 Explanation:
This section allows shareholders to pay in advance the unpaid amount on their shares even if the company has not yet called for it, provided the articles permit it.
However, no voting rights are granted for such advance payments until the amount is actually called up by the company.
✅ Key Points:
This is optional, and subject to the company’s Articles of Association.
Voting rights are based on called-up capital, not advance payments.
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