If a company is listed on the Australian Stock Exchange and a shareholder fails to pay amounts owing on shares,the company will:
A) transfer the unpaid amount to a forfeited share reserve that remains part of equity after the cost to reissue the shares has been deducted.
B) transfer the unpaid amount to a forfeited share reserve and refund the amount remaining after the cost of reissuing the shares has been deducted.
C) take action to collect the unpaid amount through the courts.
D) transfer the unpaid amount to a forfeited share account and refund the amount remaining after the cost of reissuing the shares has been deducted.

Question

Quizplus · Accepted Answer

If a shareholder fails to pay amounts owing on shares, the company will transfer the unpaid amount to a forfeited share account and refund the amount remaining after the cost of reissuing the shares has been deducted. This ensures that the company's equity is not affected by the non-payment and shareholders who have paid for their shares are not unfairly impacted. The company may also take legal action to collect the unpaid amount, but this is not the usual course of action when dealing with unpaid shares.

If a Company Is Listed on the Australian Stock Exchange