Comment on the following: A public limited company incorporated under the Companies Act, 2013 may amend its articles of association so as to confer upon it power to forfeit the shares of those members who have defaulted

Model Articles of Association under Table F of Companies Act, 2013 provides for Forfeiture of shares. A company may, forfeit shares for non-payment of calls only if it is authorised by its Articles of Association. It must be exercised strictly in accordance with the regulations regarding notice, procedure and manner stated therein, otherwise the forfeiture will be void. Forfeiture will be affected by means of Board resolution. The power of forfeiture must be exercised bona fide and in the interest of the Company. Hence a public limited company incorporated under the Companies Act, 2013 can forfeit its shares only when the Articles so empower. Where the Articles do not contain such a provision, the Articles have to be amended.