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Regarding payment of interest

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Querist : Anonymous

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Querist : Anonymous (Querist)
13 April 2012 Can a closely held co. pay interest on share application money recd. by a director? The co. intends to neither allot shares nor return the application money for 6 years.
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Ajay Mishra

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Ajay Mishra (Expert)
14 April 2012 Hi

Earlier the December 2011, notification on unlisted public company (preferential allotment) rule 2003, there was no provision for mandatory pay interest on share application money.

Now it is mandatory for public company to pay interest on share application money @15% if you are not refunding after the period of 60 days from receiving.

I will suggest you to transfer such money in unsecured loan and paid interest on such loan accordingly.

Other views are also solicited.

Regards
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