A Private Company having aurhorished share capital of

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Saugata Chowdhury (Querist)

22 September 2007 Sir
I would like to know the solution of the following situation:

1. A Private Company having aurhorished share capital of Rs 2,00,000/= but for requirment of cash the company issue share application money but not made alotment of share. This is the situation from last 2 years . What will be the possible threat in the above situation?

2. If the above mention company now increase their authorished share capital
will the problem resolved?

3. If a Private Company want to issue Pref.Share capital whether they are elligible to do that?

CA. Dashrath Maheshwari

CA. Dashrath Maheshwari (Expert)

22 September 2007 Primary thing is that a pvt co. can not issue shares to public.
Second is that Pref share capital can not be issued by a pvt ltd co. and finally there is no penalty prescribed for pvt ltd abt share application money and actually the app. money is nothing but share capital of the owners/directors only

Srinath A. N.

Srinath A. N. (Expert)

01 October 2007 Private Company can keep application money and will be shown in the balance sheet as share application money.

The articles of association shall permit for issue of preference shares.

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