Transferr application money to issued capital

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This query is : Resolved

Pradeep Soni (Querist)

10 May 2011 Dear sir,
My company have authorised capital is rs 1Crore. and issued capital is rs 5 lacs. my co. is a pvt. ltd. consurn. my co. received app. money 31 lacs in previous year from directors. i want to transferred the application money to issued capital. what is the procedure and what forms are required for it. please send me the sample copy all document who are requied for it.
Thanking Your
Pradeep Soni
C.A Final (Student)

Guest

Guest (Expert)

10 May 2011 Share Application money received should not be retained with company for more than 6 months, so its always advisable for proceed with allotment in order to avoid Auditors Qualification in Audit Report.

Well, Convene a Board Meeting & Allot shares to the applicant. Since yours is a private company, its advisable to alter minutes & allot shares on Prior Date in order to avoid audit qualification on the report which will reflect in Form 23AC & Form 23ACA As well.

Meantime, File Form 2 along with list of allotees with ROC, use the prior date as an option , anyway, you have to pay an additional fee to ROC(since your allotment is prior dated.

Further, issue share certificates on date of allotment as well make an entry in Statutory Register of Members - the allotees name, so that the applicants will become shareholders.

In Context of Accounts, make a transfer entry to capital so that your entire share allotment procedure is completed.

Jayashree S Iyer

Jayashree S Iyer (Expert)

11 May 2011 Can you please highlight the section which specifies that the share application money cannot be retained for more than 6 months?

I agree with Mr. Sriram as to the procedure to be followed for issue of shares. However your last year accounts and audit would have been finalised showing the amount under "Share application money". Hence there is no need to amend the minutes etc.

On the current date hold a board meeting, pass a resolution for allotment of shares and file Form 2 within 30 days of allotment. Issue share certificates under the common seal of the company and make necessary entries in the Register of Members.

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