Hi Forum Members,
We are a Pvt. Ltd. Company engaged in power generation. Nearly one year ago, we received share application money from ABC Pvt. Ltd. However, shares are yet to be allotted and the amount received has been shown as "share application money - pending allotment" in our company's account.
Now due to change in circumstances, ABC Pvt. Ltd. has requested us to allot the shares in the name of a newly incorporated firm, XYZ Pvt. Ltd. Barring few common Directors / Shareholders between ABC and XYZ, there is no other relation between the two firms.
Ideally, we should refund the amount to ABC Pvt. Ltd. and ask them to route the money through XYZ Pvt. Ltd. However, this amount is seizable and has already been expended. Arranging funds for transfer is ruled out.
What would be our options? Can we take a declaration/letter backed by board resolution from ABC Pvt. Ltd. stating that the money transferred to our company was on the account of an individual director/shareholder and that ABC Pvt. Ltd. would have no claim now or in future in our Company. Then we can use this amount to show as investment from XYZ Pvt. Ltd. where the common director/shareholder has tranferred the money to our Company on XYZ's behalf.
ABC Pvt. Ltd. will be deregistered with ROC post allotment of shares to XYZ.
Is the above option feasible? What would be the declarations that we should procure from the two companies? Is there any other feasible solution? We are banking heavily on a feasible solution from the Forum members.
Regards,
Balaraju
CAclubindia
