Payment from paid up Capital

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Yes, you can generally use the paid-up capital of a private limited company to cover various business expenses. This includes operational costs, incorporation fees, salaries, and even fines for late filings, such as those for GST returns. Once the capital is subscribed and registered with the ROC, the company has the flexibility to utilise these funds for its business activities.

PREMNATH

PREMNATH (Querist)
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22 January 2021 Sir
Can I use paid up Capital of a Private Ltd Company for paying expenses like fine for not filing GST Nil returns on time.
Thanks

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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22 January 2021 Yes you can . Once, the capital is subscribed, the company is free to spend on its business activities ( payment of Incorporation fees, advertisement, salary & etc), there is no compulsion under any act to restrict the spending of the company.

Jatin Bajaj

Jatin Bajaj (Expert)
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23 January 2021 Yes, once the amount is received by the Company and necessary filing is done in ROC, the amount of paid-up capital may be used for managing the business expenses of the Company

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