Share Application Money Pending Allotment.

This query is : Resolved

TEJAS (Querist)
Follow

16 October 2017 For what period can a Pvt. Ltd. company hold share application money as per Companies Act 2013 and deposits received in 2016-17.

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
Follow

17 October 2017 1. Allotment shall be done within 60 days of receipt of application money. If allotment is not done within 60 days then refund the whole application money within next 15 days. Refund application money along with interest @12% p.a. after the expiry of 60 days, and·It shall be treated as a public deposit after the expiry of the said 15 days.
2. File the details of monies so accepted to the Registrar in Form DPT 3 duly certified by
its statutory auditor

Message likes : 1 times

TEJAS

TEJAS (Querist)
Follow

17 October 2017 Shall the situation be same for a Pvt. Ltd. company also? bcoz as per my knowledge and reading of the act, this provision shall apply only to public Ltd companies

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
Follow

25 July 2025 Great question! Here's the clarification on **share application money pending allotment and its treatment under the Companies Act, 2013** for **Private Limited Companies**:

---

### 1. **Time period for allotment of shares after receiving share application money**

* As per **Section 39(4)** of the Companies Act, 2013:

* The company **must allot shares within 60 days** of receipt of the share application money.
* If allotment is **not done within 60 days**, the company must **refund the entire application money within the next 15 days** (i.e., within 75 days from receipt).

### 2. **If refund is not made within 15 days after 60 days**

* If the company **fails to refund within this period**, then:

* The amount will be **treated as a deposit** under **Chapter V of the Companies Act (Sections 73 & 74)**.
* The company has to comply with deposit acceptance rules, which includes:

* Filing **Form DPT-3** with the Registrar of Companies (ROC), certified by the statutory auditor.
* Paying interest @12% p.a. on the amount due from the expiry of the 75-day period until refund.

### 3. **Applicability to Private Limited Companies**

* **Section 73 and 74 (Deposit Rules)** apply to **all companies except certain government companies**, which means **Private Limited Companies are also covered**.
* So, **even Private Limited Companies are subject to these provisions**.
* The **only exemptions** are:

* Companies regulated by SEBI (e.g., listed companies).
* Certain categories as specified under the Act.

### 4. **Summary**

| Aspect | Details |
| ------------------------------- | ----------------------------------------------------------------- |
| Time limit for allotment | 60 days from receipt of share application money |
| Refund timeline if no allotment | Within next 15 days after 60 days (total 75 days) |
| Consequence of not refunding | Amount treated as deposit; must file Form DPT-3; pay 12% interest |
| Applicability | Applies to Pvt. Ltd companies as well |

---

### **Important Notes**

* This timeline is **strictly enforced** to protect applicants and maintain transparency.
* Failure to comply may result in penalties on the company and its officers.
* It is good practice to **allot shares promptly** or refund the money timely to avoid complications.

---

If you want, I can help you draft a checklist or template for managing share application money and filings. Would that help?

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now