Share application money
This query is : Resolved
27 February 2014
Can a company receive an amount of share application money in excess of it's Authorised capital ??
If yes, why so??
If yes, why so??
Sandeep Dharar
(Expert)
27 February 2014
yes a co. can receive more application money then its authorised capital.
Suppose A ltd has in its Auth. Cap 20000 eq. shares @rs. 100 each i.e, Rs 20,00,000.
Issued & received 20000 eq. shares at Rs 200 each (Rs. 100 premium). i.e, Rs. 40,00,000.
But remember a co. can't issue more shares than its authorised capital. (i.e, 20000 eq. shares only in our example).
Suppose A ltd has in its Auth. Cap 20000 eq. shares @rs. 100 each i.e, Rs 20,00,000.
Issued & received 20000 eq. shares at Rs 200 each (Rs. 100 premium). i.e, Rs. 40,00,000.
But remember a co. can't issue more shares than its authorised capital. (i.e, 20000 eq. shares only in our example).
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