Capital

This query is : Resolved

Sankar Chakraborty (Querist)
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30 March 2012 Dear Experts,

our Managing director (pvt ltd co) reinvest Rs. 6.00lac as share capital in his company
what to show ?
bank a/c... Dr
to share appliation

or
bank a/c .. dr
to capital a/c

please guide

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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30 March 2012 A company cannot have just capital A/c. It can only have Share Capital.

Has the director PURCHASED shares from the company.

If yes, then only it can be shown in Share Capital.

Otherwise, it has to be shown as Unsecured Loan from Director.

Sankar Chakraborty

Sankar Chakraborty (Querist)
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30 March 2012 when 'share application' is to be used
is it for other than director ?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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31 March 2012 No share application is used when ANY person subscribes to the shares of the company.

The person can be a director or some other person.

Sankar Chakraborty

Sankar Chakraborty (Querist)
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31 March 2012 thanks sir but in this case what entry to be in books ?
i know Form 2 to be submitted with ROC but my problem is about journal entry in books please guide

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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31 March 2012 If the director has purchased the shares, then the entry shall be:

Bank A/c Dr
To Share Capital

If he has not purchased the shares and has just given the amount to the company, then the entry shall be:

Bank A/c Dr.
To Loan from Director

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