Chapter IV - Share Capital and Debentures
Section 50
Section 50: payment in advance of calls
If its articles authorise it, a company may accept from a member all or part of the amount unpaid on shares even before any call, but the advance carries no voting rights until called up.
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Need advice on Section 50?
This article is for general information. Refer to the Companies Act, 2013 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) A company may, if so authorised by its articles, accept from any member, the whole or a part of the amount remaining unpaid on any shares held by him, even if no part of that amount has been called up. (2) A member of the company limited by shares shall not be entitled to any voting rights in respect of the amount paid by him under sub-section (1) until that amount has been called up.
Introduction
Section 50 allows payment in advance of calls where the articles permit. Sub-section (2) separates money from votes: the member gets no voting right for the advance until the company calls up that amount.
Section 47(1) expressly makes equity voting subject to section 50(2).
Key takeaways
Articles needed
The company must be authorised by its articles to accept uncalled amounts.
No early votes
Amounts paid in advance carry no voting rights until called up.
Confirm authority in the articles
Check that the articles authorise acceptance of the whole or part of the unpaid amount before it is called. Without that authority, section 50(1) does not apply.
Record the advance separately
Record the amount each member pays in advance separately from called-up capital. Until the company calls up that amount, the member has no voting rights for it under section 50(2).
Practical preparation
Check the articles; record each advance by member and share; exclude advances from poll calculations; update records when a call later applies the advance.
Commencement and amendment record
Section 50 came into force on 12 September 2013 under S.O. 2754(E) dated 12 September 2013. India Code’s consolidated text shows no amendment to this section, and the Companies (Amendment) Acts of 2015, 2017, 2019 and 2020 contain no amending instruction for it.
Practical checklist
Do
- Keep a separate ledger for calls paid in advance.
- Exclude advances when computing poll votes.
Avoid
- Do not accept uncalled money without authority in the articles.
Illustrative example
Hypothetical: early payment
A member pays the full unpaid balance on partly paid shares before any call. The articles permit this.
Accept
The company may accept the money under section 50(1).
Votes
Poll votes stay based on the called-up paid amount until the call is made.
Outcome
- The member’s voting position changes only when the company calls up the amount.
Glossary
- Calls in advance
- Unpaid share money that a member pays before the company calls it up.
Frequently asked questions
Does paying early increase voting power?
No. Under section 50(2), no voting rights attach to the advance until the amount is called up.
Need help applying this provision to your situation?
Contact BizeneedLast updated 11 October 2026