Company law

Hi,

Yes Compnay can accept share application money, allotment has to be done within reasonable time. Reasonable time is not prescribe any where, however we can consider it as six months.

In your case company has to increase its authorised capital immediately so as to justify, acceptance of share application.

Other views are solicated.

Regards

Hi

It is general scanario in closely held companies where company do accept share application money inspite of the fact that there in no margin in Authorised Capital. Until and unless, company does not make any allotment, I dont think there in any issue.

The purpose of share application is towards subscripttion of capital. And if company is acccepting the same, then in true sense there must be allotment until other circumstances exists. Therefore, company should avoid such practices of acceptance of share application money without raising the authorised capital Bar upto that extent.

Regards- Sudhir

I agree with the view of Mr. Sudhir Garg. Being a Company Secretary, i would not advice to accept Share Application money if there is no marging in Authorised Share Capital.

However, in the above case, after accepting application money, Authorised Capital may be properly enhanced and then allotment can be made.

Alternatively, the company can return the share application money to the applicants, if it does not want to increase the authorised share capital to absorb the share application money by making further issue of shares.

parthasarthy naidu 

Agreed with Ankur and Naidu view. In no case share application money can be received  beyond authorised capital and

allotment is condition precedent to the acceptance of share application money.

Experts views are welcome.......