Call Letter — Call on Shares

3. Call Letter — Call on Shares

Meaning of a call: where shares are issued partly paid (a common practice for large issues), the company does not demand the full nominal value at once; it collects the balance in one or more later instalments called calls, as and when the company needs the money. A call is thus a formal demand made by the Board of Directors on shareholders holding partly paid shares, requiring them to pay all or part of the amount still unpaid on their shares.

Requisites of a valid call (drawn from the company's own Articles of Association, typically on the lines of Table F of Schedule I to the Companies Act, 2013):

• it must be made by a resolution of the Board of Directors;
• it must be made uniformly on all shares falling within the same class (a company cannot call up one shareholder's partly paid shares and not another's, within the same class, on different terms);
• the notice of the call must give shareholders at least 14 days' notice, specifying the amount called, the time for payment and the place/mode of payment (bank branch, cheque, online transfer, etc.); and
• the total amount called up on a share, together with all sums already paid, must never exceed the nominal (face) value of the share.

Consequence of default: the Articles usually authorise the company to charge interest on a call not paid by the due date, and, if the default continues, to proceed to forfeit the shares after due notice — a topic studied in "Issue of Shares" earlier in this syllabus.

Specimen call letter:

SAHYADRI TEXTILES LIMITED
Regd. Office: 88, Shivaji Nagar, Kolhapur - 416 003
CIN: L17110MH2010PLC201456

Ref. No. STL/CS/2025-26/259                                    Date: 5th October, 2025

To,
Mr. Suresh N. Patil
Folio No. STL-06214
204, Ashirwad Apartments, Rajarampuri,
Kolhapur - 416 008

Dear Sir,

Sub: First Call on Equity Shares

We wish to inform you that the Board of Directors of the Company, at its meeting held on 1st October, 2025, has made the First Call of Rs. 3 per Equity Share on the 400 Equity Shares of Rs. 10 each held by you, on which Rs. 5 per share (application and allotment money) already stands paid. …