We are a Private Ltd Company registered with Rs.1lac of authorised & paid-up capital. We are in the process of sourcing funding for our company. Wanted to know:
a) Does the share premium a/c forms a part of authorised captial. Thus if we want to raise 60lacs by issuing shares, can we have an authorised captial of 10lacs & collect the balance through share premium a/c without raising the authorised share capital to 60lacs? Here we are assuming shares are issued at a premium.
b) Can this amount received as share premium be utilized for growth and expansion of the company? Is section 78, which restricts use of share premimum monies for 5 purposes, applicable for pvt ltd company?
CAclubindia
