Which of the following is the correct statement in respect of Forfeited Shares :-

When shares are forfeited by a company due to non-payment of allotment money or calls, the company regains ownership of those shares.

As per the Companies Act, the company has two options regarding forfeited shares:

1. Cancel the shares - The company may choose to cancel these shares permanently. In this case, the share capital of the company gets reduced.

2. Re-issue the shares - The company may re-issue these shares to new or existing members.

When re-issuing forfeited shares, the company has flexibility regarding the price:

• Can be re-issued at par (face value)
• Can be re-issued at premium (above face value)
• Can be re-issued at discount (below face value)

However, there is one important restriction: If re-issued at a discount, the discount amount cannot exceed the amount already forfeited on those shares.

For example, if ₹3 per share was forfeited, the maximum discount allowed on re-issue is ₹3 per share.

Options 1, 2, and 3 incorrectly state that forfeited shares can "only" be re-issued at premium, par, or discount respectively. This is wrong because the company has flexibility in pricing and also has the choice to cancel rather than re-issue.

Option 4 correctly captures both possibilities available to the company - either cancellation or re-issue.