Allotment of share for the consideration other than cash

At the time of Incorporation, shares to the subscribers can never be allotted otherwise than on cash.

Thanks and regards

Deepak Maharishi

Dear Friend

At the time of incorporation, the subscriber of MOA will specify the no of shares  he will take. However the promoter of the company make preliminary expenses for incorporation of company and after incorporation such money the promoter had paid for incorporation can be converted in to equity as per convenient of the company.

The subscriber of the MOA & AOA will be allotted shares only in cash.

Regards

CS Ajay Mishra

Thanks for the reply,

Can you please provide me the section and provision which is/are not allowing  for the same………

You may please refer to the commentary specified in Rammaiya or Chandratre's.

Following is the case law also

Kanduri Lakshmiah V/s Adoni Electric Supply Co. Ltd. (1944) 14 Comp Cas 63 (Mad)

Reference - Dr. KR Chandratre's Company Law

dear all

if a proprietorship business convert into Pvt. ltd. than the capital of proprietor automatically convert into share capital and proprietor (promoter subscrieber of MoA & AoA)  will have get no. of share in ratio of his capital laid in proporietory business. so is there need to allot share in cash ??

Regards

Dear all,

According to you all, if someone has a technical or science knowledge for the product and one shareholder has money and though he is ready to invest higher than the minimum required capital in cash and the other partner’s assets in Market value are higher than the 1,000,000/-  in this situation they can not start a company and they have to go for other options like Partnership firm etc. and than they can simply convert the same in to company.

Is it my assumption is correct ?