Lila (Job) 11 September 2019
1. Can subscribers to memorandum bring in cash as capital contribution? If not, is it OK to show it as receivable on Balance Sheet (as same has not been received through banking channel).
2. Is there any responsibility on part of auditor to report this.
3. Pre-incorporation expenses were paid by subscribers (for company formation). Further some assets like Laptop etc was contributed by Subscribers. Can both of these be treated as part of capital contribution.
Jatin Bajaj (CS) 12 September 2019
Subject to the provisions of the Companies Act 2013, within the period of 30 days from the date of incorporation of the Company, the Company shall open the current bank account with the bank and the promoters/subscribers shall contribute the subscripttion money in the said bank account. Moreover as per Companies Amendment act 2019, the Company have to file the declartion with ROC within a maximum period of 180 days to ROC in form INC 20 A that the subscribers has paid fully to the amount of shares held by them in their respective bank account. So cash contribution is not allowed.
Further pre incorporation expense include amortization of prelimnary expense such as expense incurred on drafting of documents, expenditure for printing of MOA and AOA , expendnditure incurred on incorporating Company etc. and deduction is allowed unders Section 35 AD under the head PGBP