share application money

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hussain

hussain (Querist)
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04 September 2009 sir,
can we receive share application money from companys staffs in private limited company

Ankur Garg

Ankur Garg (Expert)
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04 September 2009 Yes u can receive share application money from any body.

But untill allotment of share such person shall not be considered as member of the company.

Regards

Ankur Garg

Ankur Garg (Expert)
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04 September 2009 After accepting 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

vrnanda

vrnanda (Expert)
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04 September 2009 Agreed with Mr. Ankur Garg.

Regards,

CS Vivek Hegde

CS Vivek Hegde (Expert)
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05 September 2009 Dear Mr. Ankur Garg

The time lag of 6 months is applicable only if the money received is FDI. Bcz FEMA requires allotment to be done within 180 days. In all other cases there is no such practice which is being followed.

rgds

Ankur Garg

Ankur Garg (Expert)
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07 September 2009 Thanks Vivek Ji for sharing.

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