What Is Surrender?

Surrender of Shares:- Surrender of Shares is a voluntary act (of shareholder) of giving up the shares to the company. When the shareholder feels that he cannot make the payment of remaining calls, then he can opt for surrender of shares. However, the company is not under any obligation to accept the shares surrendered. For a valid surrender of shares:-

1. The directors of the company must be authorised by articles.

2. The shares to be surrendered must be partly paid.

3. Justification of forfeiture of shares.

The main objective of accepting surrender of shares is to pass over the long and complex process of forfeiture of shares.