Allotment of shares

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 January 2013 When a company is initially incorporated and a share capital is subscribed at the time of incorporation of the company then whether

a) Shares can be issued without receiving money in the bank account?

b) Is it complied if the initial money is received in cash as company will not have bank account

c) what is the time frame within which share allotment should be done

Ajay Mishra

Ajay Mishra (Expert)
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19 January 2013 Hi

Yes, shares can be allotted without receiving a cash from subscribers.

Not it is not mandatory that all subscription money should be received in cash. It may be in trench also. Partly in cash and party by cheque later on.

No time period is defined for receiving of subscription amount from subscriber.

Ajay Mishra

Ajay Mishra (Expert)
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19 January 2013

In accordance with the provisions of section 36(2)of the Companies Act, 1956, all money payable by any member to the company under the MOA or AOA shall be debt due from him to the company. Further, a subscriber to the memorandum must pay for his shares in cash even if the promoters have promised him the shares for services rendered in connection with the promotion of the company.

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