15 October 2011
A Pvt. company has received FDI in the form of Share Application Money. The allotment is pending, but the company first deposited the same in FD account and then used the same to give advance to one of its associate for business purpose.
Are they contravening the provisions of Company Law and FEMA?
31 October 2011
FDI in form of share application money has to be converted into share capital within 180 days of receipt of money. Now Company needs to see whether time period of 180 days has been completed or not. If yes then it is advisable to send all the documents to RBI and wait for the response of RBI.
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