Which statements among the following are CORRECT?

(A) A public company's shares are generally transferable.

(B) Share application account is a personal account.

(C) The director of a company may be a shareholder.

(D) Paid up capital can exceed called up capital.

Choose the correct answer from the options given below:

Statement (A): A public company's shares are generally transferable - CORRECT

Public companies are characterized by free transferability of shares. Unlike private companies which have restrictions on share transfer, public company shares can be freely transferred in the market.

Statement (B): Share application account is a personal account - CORRECT

Share Application Account represents the account of applicants who apply for shares. Since it relates to persons (the applicants/prospective shareholders), it is classified as a personal account following the rule "Debit the receiver, Credit the giver."

Statement (C): The director of a company may be a shareholder - CORRECT

There is no legal prohibition on a director being a shareholder. Directors can hold shares in the company they manage. While directors need not necessarily be shareholders (except where qualification shares are mandated), they are permitted to be shareholders.

Statement (D): Paid up capital can exceed called up capital - INCORRECT

Paid-up capital is the amount actually received from shareholders out of the called-up capital. By definition, it cannot exceed called-up capital.

Called-up Capital = Paid-up Capital + Calls in Arrear

If Called-up Capital = ₹1,00,000 and all shareholders pay → Paid-up Capital = ₹1,00,000

If some default (Calls in Arrear = ₹10,000) → Paid-up Capital = ₹90,000

Paid-up capital is always ≤ Called-up capital, never more.

Statements A, B, and C are correct while D is incorrect.

Correct Answer: Option 1