State true or false with reason.
1) Directors can forfeit the shares for any reason.
After paying money on a share application, When a share applicant fails to pay the call money or premium on shares in spite of repeated reminders and warnings directors/company can forfeit the shares.
2) Once the application money is received, directors can immediately proceed for allotment of shares.
Directors can proceed for allotment of shares only after receiving the minimum subscription amount of the issued amount by cheque or other instrument complying all legal requirements.
3) Joint-stock company form of the business organisation came into existence after the industrial revolution.
As the volume and scale of trade and industry expanded, specially after the industrial revolution, a very large unit of commercial organisation requiring large capital and greater managerial skill, called Joint stock company came into existence.
4) Equity shareholders get a guaranteed rate of dividend every year.
One of the features for equity shares is the rate of dividend payable on equity shares keeps on changing from one year to another. So, there is no question of guaranteed dividend every year for equity shareholders.
5) Face value of shares and market value of shares is always the same.
Face value of shares means issue price of shares while market value of shares means trading price of shares at stock exchange. Face value of shares remains the same and fixed. However, market price changes as per the performance of the company. Hence face value and market value of shares are not the same.
6) Sweat shares are issued to the public.
Sweat shares are issued by a company to its directors or employees at a discount or for consideration other than cash. Sweat shares are not issued to public.