Acceptance of share application money
This query is : Resolved
25 January 2009
Is it legally valid for a private limited company to accept the share application where the sum of such share application money and the paid up capital exceeds the authorised capital.
I think it is not legally valid. However I have seen many companies which have accepted share application money in excess of authorised capital of the company
I think it is not legally valid. However I have seen many companies which have accepted share application money in excess of authorised capital of the company
CA Sanjeev Kr Jain
(Expert)
25 January 2009
excess amt could be assumed as premium
CA.Tarun Maheshwari
(Expert)
25 January 2009
Sanjeev is correct. The excess share application money shown in balance sheet is alloted with Premium later on. Legally, its face value can't exceed Authorised SHare capital.
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