A subscriber to the shares of a company, wherein the shares were only partly called up, paid all the money due on the shares held by him in advance. Later, the shareholder claimed interest on the money advanced by him an

According to section 50(1) of the Companies Act, 2013 a company may if authorized by its articles accept from any member the whole or a part of the amount remaining unpaid or any shares held by him, even if no part of that amount has been called up. Section 50(2) of the said Act provides that a member of the company limited by shares shall not be entitled to any voting rights in respect of the amount paid by him until that amount has been called up. The amount so received in advance will be treated as a loan with a specific purpose, where the company goes into liquidation, calls in advance will be repaid first, before the capital is returned. Interest on the calls-in-advance may be paid, if authorized by the articles of association. Accordingly, in the instant case, the shareholder can claim interest on the amount advanced by him, if authorized by the articles of association. However, he shall acquire voting rights on the amount paid up in advance only when the amount is called by the company.