Share application money in excess of authorised capital

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Guest

Guest (Querist)

15 February 2013 Hi,

Someone may please reply to the following :

ABC Private Limited has Authorised Capital of Rs.5 Lacs and Paid up Capital of Rs.1 Lac as on 31.03.12.

Query 1

Company has Share application money pending allotment of Rs.2.75 Crores as on 31.03.12.
(FDI) Amounts received from Foreign Company.

Is there any violation or non compliance in respect of Companies Act, as the amounts received are in excess of AC ?

Ans : .............................

Query 2

Company has taken unsecured loans from two Directors of Rs.9 Lacs and Rs.11 Lacs.

Whether this transaction is to be treated as a Related Party Transaction and any disclosure is mandatory.

Ans : .............................

Query 3

Company has Reserves and Surplus (i.e. accumulated losses) of negative balance Rs.2 Crores.

Why CARO does not apply to this private company?

Ans : .............................

Note : 1. Company has not availed any loans from bank or financial institution.
2. Turnover is less than Rs.2 Crores.

Thanks.

I will wait for your replies.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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15 February 2013 Query 1

As such there is no issue unless the application money received from Outside India.

Also, please see the tax issues that may prop up. you may refer to the following link:

https://www.taxmann.com/fileopener.aspx?stype=3&searchid=7474

Query 2

Yes, these are related party transactions.

Query 3: I hope some other expert replies to this.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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16 February 2013 Accumulated losses,shown in 'reserves and surplus' can be ignored for checking CARO,2003 eligibility.

Courtesy:- Clause 19 of ICAI Publication 'Statement on the Companies (Auditors Report) Order,2003.

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