Allotment of shares

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This query is : Resolved

Amee (Querist)

02 September 2009 For a newly formed Private Company-

1) If Comapny has received application money in dec. 08 but upto Aug. 09 no allotment is made. Is it violation of Law?

2) If not then from how many days from receipt of application money company has to allot the shares?

3) And Is it required to allot the shares before filling of annual return to Roc as financial year ended?

4) from how many days from allotment Form-2 has to file to ROC?

Ankur Garg

Ankur Garg (Expert)

03 September 2009 Hi,

As is evident that the Company has accepted the Share Application Money you may do one simple thing. You may record the above transaction i.e. receipt of share application money and assurance given to proposed allottee in the board meeting minutes.

In other words simple noting of such receipt in the board minutes would be enough. No need to take any kind of approval from any concerned authorities.

Regarding time limit to convert such share application money into capital the law is silent. However as per practice allot share with 6 months of the receipt of application money.

Best Regards

Ankur Garg

Ankur Garg (Expert)

03 September 2009 Return of allotment is required to be submitted u/s 75 by filing form-2 with concerned Registrar of Company with in 30 days of passing board resolution for allotment of share.

Procedure

1. First convene board Meeting for allotment of equity shares and pass necessary resolution for allotment.
2. Download form-2 from MCA Site www.mca.gov.in
3. Fill form-2 and attach list of allottee.
4. Get form-2 certified from practicing CS/CA and upload the same on MCA Site.