Share capital contribution in cash or kind

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CA Akhil Goyal (Querist)
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15 November 2013 Hello Members,

I want to know that, i have to incorporate a company of paid up capital of 2 crore and the proposed director desires to bring its own asset/property and transfer this to company without consideration in order to fulfill the capital of Rs. 2 crore.

Is it mandatory to bring capital other than cash in case of Private limited company.?
Kindly update me on this urgent basis.
Thanks

Nikhil Kaushik

Nikhil Kaushik (Expert)
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16 November 2013 no...it is not mandatory to bring in cash. the consideration can be brought in kind also.

CA Akhil Goyal

CA Akhil Goyal (Querist)
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16 November 2013 If possible , then pl quote me the section so that i can discuss with client by showing them section.

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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25 July 2025 Sure! You can refer to the following **sections of the Companies Act, 2013** to explain that capital contribution **can be in cash or kind**:

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### Relevant Sections:

1. **Section 2(52) – Definition of "Paid-up Share Capital"**

* "Paid-up share capital" means the amount of money **credited as paid on shares issued**; it can include **consideration other than cash**.

2. **Section 2(30) – Definition of "Share Capital"**

* Share capital can be issued for **consideration in money or money’s worth**, which means contribution can be in cash or other assets/property.

3. **Section 62(1)(b) – Issue of shares other than for cash**

* This section allows a company to **issue shares for consideration other than cash**, such as **assets or property**.

4. **Rule 13 of the Companies (Share Capital and Debentures) Rules, 2014**

* Deals with allotment of shares against **non-cash consideration**, specifying procedure for valuation and due diligence.

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### Summary you can share with your client:

> "As per **Section 2(30) and Section 62(1)(b) of the Companies Act, 2013**, the company may issue shares for consideration either in cash or in the form of other assets/property (money’s worth). Hence, it is **not mandatory to bring capital only in cash**. Contribution in kind is allowed, subject to proper valuation and compliance with the applicable rules."

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If you want, I can also help draft a short explanation letter for your client quoting these sections. Would you like that?

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