Subscription to share capital by promoter director

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Sanjay (Querist)
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24 June 2009 Hi,

A Pvt. Ltd. Co. was formed in August 2008. Its two promoter directors have till date not paid the share capital money in the companys account.

The company has surplus cash, but bringing in share capital in cash will attract 269SS of the Income tax act.

So for the year ended 31/03/09, what should be reflected in the companys balance sheet?

Share capital called for but not received? Or is there any other way of reporting the same?

What precautions / notes do we have to give in our audit report?

Can a cheque be issued in the month of march 2009, not cleared till 30/06/09, so as to show capital received and get the cheque cleared in July?

Kindly give your views and comments.

Thanks,

CA Sanjay R Salgia.

G.GANESH

G.GANESH (Expert)
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25 June 2009 The information provided looks incomplete. If the Promoters have not paid their subscription money how did the company get cash. Who met the premimy expenses. In any case cash needs to be brought in by the promoters towards their share of subscription money to the extent the minimum paid capital of a pvt ltd co or the minimum capt by MOA is met. WRT income tax as the identity and source of income are expalinable i think there should not be any problem especially when a new co is formed the bank account would not have been opened and the intial deposit in bank should be in cash which has to be met by promoters and no one else.

CA Sanjeev Kr Jain

CA Sanjeev Kr Jain (Expert)
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25 June 2009 better you received cash form promoter and directly credit to share capital account instead of routing through share application account there will no application of 269SS

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