21 February 2014
Share application money was received from an applicant several years ago but against the same Pvt. Ltd. company could not allot shares as the applicant has expired. Is the company correct in showing the money received as share application money? Should the company allot the shares to one of the legal heirs in absence of any written will?
22 February 2014
As per section 205C of the Companies Act, 1956, application money received by companies for allotment of any securities and due for refund, in case such amounts have remained unclaimed and unpaid for a period of 7 years from the date they became due for payment, shall be credited to the Investor Education and Protection Fund.
Further, once the complete application along with application money is received by the company, the company should have allotted the shares. In case of any nomination, shares can be transferred in the name of the nominee on the production of the death certificate. In case there is no nomination, transmission, in the absence of any written will, can take place only in accordance with the succession certificate/letter of probate.
CAclubindia
