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Charge on Uncalled Share Capital
Every Company has the power to call the uncalled portion of
the issued capital of the company. Once the uncalled portion of the capital is called for and is paid
up by the shareholder, the same can be put to charge by the company.
But if the
capital is not called for and remains as uncalled capital, then unless the
articles / memorandum of association of the company authorise the company to
charge the uncalled share capital, the company cannot create any charge on such uncalled portion, as the company do not have any implied authority in this
Only after an express power / authority given under the Memorandum or
Articles of Association of a company, the company can charge its uncalled
One exception or limitation to this power is that on the
reserve capital (that is the capital reserved to be utilised in the event of
winding up) a charge cannot be created even though the company is authorised to
create a charge on the uncalled share capital of the company.
If the current
provisions in the articles do not provide for any such authority then the
articles can be modified by a special resolution in the general meeting to
include the power to charge on the uncalled capital.