Subscriber to moa & aoa private limited case

This query is : Resolved

NAVEEN KUMAR (Querist)
Follow

02 May 2013 Question 1. If a person subscribe to take certain number of shares in a private limited company but after formation of company does not pay for such shares. what are the option before company

Question 2. If a person subscribe to take certain no of share in a private limited company but pays some part of the subscription only. and on top of that after some time demands his money back on some ground, what options are available to company

Ajay Mishra

Ajay Mishra (Expert)
Follow

02 May 2013 Hi

Even though the signature of a subscriber to memorandum of association of a company is not properly attested, once the memorandum has been registered, such subscriber cannot divest himself of his liability.

A subscriber to memorandum cannot, after issue of certificate of registration, repudiate his subscription on ground that he was induced to sign by misrepresentation of an agent of company. [Metal Constituents Ltd., In re (1902) 1 Ch. 707].

If subscribers to memorandum have any objection to memorandum and articles of association, the time to object is before putting their signatures to it. [East Bengal Sugar Mills Ltd., In re (1941) 11 Comp Cas 169 (Cal)].

In accordance with the provisions of section 36(2) of the Companies Act, 1956, all money payable by any member to the company under the MOA or AOA shall be debt due from him to the company. Further, a subscriber to the memorandum must pay for his shares in cash even if the promoters have promised him the shares for services rendered in connection with the promotion of the company.

Message likes : 1 times

NAVEEN KUMAR

NAVEEN KUMAR (Querist)
Follow

02 May 2013 Sir,
what option does company have, if subscriber is not willing to pay, Is it possible to allot those share to some one else.

Ajay Mishra

Ajay Mishra (Expert)
Follow

02 May 2013 No, u can not allot such shares to other, you will received such amount to the subscriber whose name is mention in MOA & AOA.

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