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Form 5 INV query

Yogesh Shah (Managing Corporate Finance) (1051 Points)

12 July 2013

Hi Guys,

I have one query regarding applicability of Form 5 INV.

Our client is one private limited company which have accepted share application money from 14 shareholders. This amount lying in Company Accounts for around 2 years. And now Company Mgmt is thinking to convert it in proper unsecured loans.

As per my interpretation of Form 5 INV provisions, application money received from shareholders AND DUE FOR REFUND is to be reported in Form. So, can I take a stand that concerned Private Company is NOT required to file this Form since in any way they are not going to refund this amount to shareholders.

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3 Replies

umaa's legal clinic (simple solutions for complex legal issues) (165 Points)
Replied 12 July 2013

Dear Yogesh,

1. Company had accepted applications for issue of shares through private placement.

2. The company is bound either to allot and issue hares within three months from the date of allotment or to refund the amount.

3. And accept deposits from them.

Yogesh Shah (Managing Corporate Finance) (1051 Points)
Replied 12 July 2013

Originally posted by : UMA DEVI
	Dear Yogesh, 1. Company had accepted applications for issue of shares through private placement. 2. The company is bound either to allot and issue hares within three months from the date of allotment or to refund the amount. 3. And accept deposits from them.

Hi,

Sorry, but I didn't get what you wanna say.

Yes, Company HAD accepted applications but thereafter Company didn't issue shares to them. Now, Company wants to convert that amount in unsecured loans. Even shareholders don't have any problem with this. Actually, all shareholders are known to each other and belongs to same friend / social circle.

Kindly let me know if you have any further saying and haa.. thanks for the earlier reply