Hi,
Will 'share application money pending allotment' be counted as 'Investment' for the purpose of Section 372A(1)(c)?
Regards,
CA Rohit
(In Practice)
(71 Points)
Replied 14 March 2012
Sec.372A regulates the following transactions:
1. Making any loan to any body corporate.
2. Acquiring the securities of any other body corporate.
3. Giving any guarantee or providing any security to:
a. A person who gives a loan to any body corporate; or
b. A body corporate which gives a loan to any other person.
I think the "share application money pending allotment" covers under acquiring the securities of any other body corporate so the amount will be added for the purpose of Section-372A.
Pankaj Arora
(Learner)
(3134 Points)
Replied 14 March 2012
No. share application money will not count for investment till shares not alloted
CA Rohit
(In Practice)
(71 Points)
Replied 14 March 2012
As per this section the previous approval is required.So i think when some one is making application for allotment of shares then previous approval is required as well as the whole of the share application money will be considered for calculation the limit.
Ankur Garg
(Company Secretary and Compliance Officer)
(114768 Points)
Replied 14 March 2012
No… share application money pending allotment' will not be counted as 'Investment' for the purpose of Section 372A(1)(c).
Reason being Section 372A(1)(c) is about “acquisition of securities” of any other body corporate by way of subscripttion, purchase or otherwise. Receiving share application money in no way equal to “acquisition of securities”.
Thanks
Kiranmayi
(Company Secretary)
(37 Points)
Replied 14 March 2012
Dear Ankur Sir,
Thank You.
Our's is a closely held public Company. The investments made by the Company during the current and the previous financial years need previous authorisation by a Special Resolution passed in general meeting.
The same has not been done and no forms (Form 23) have been filed with ROC for registration of Special resolutions.
Now, kindly clarify,
- If I update the previous General meeting minutes to include the authorisations aforesaid, there is no default of Section 372A and as Forms have not been filed penalties mentioned under Section 192 only gets attracted. Am I correct?
- If I file all the necessary forms with late fee, am I still liable for penalty mentioned under Section 192(5)?
- A specific Special resolution must be passed for every Inter-Corporate Investment/guarantee in excess of the limit, which require separate Form 23s for each investment/guarantee, unless the date of events are within 30 days from the previous event. Am I correct?
Hope I am clear.
Regards,
Originally posted by : Pankaj Arora | ||
No. share application money will not count for investment till shares not alloted |
Agree....
CA sumit chejara
(ca final)
(99 Points)
Replied 15 March 2012
No dear it is clearly vmentioned in SEc 372A that share application money will not be taken in to account.
CA Rohit
(In Practice)
(71 Points)
Replied 15 March 2012
I know it is not considered when calculating the capital employed. But i think she is asking whether it is included in Investment limit u/s 372A. Correct me if i am wrong...
Thanks
Akhilesh Kumar Jha
(Company Secretary and Legal)
(60 Points)
Replied 15 March 2012
Acquisition by way of subscripttion, puchases or otherwse of the securities of any other body corporate falls within the ambit of section 372A, Share application money paid on application for shares in another company will notcome within the purview of this section.
Jiten Gupta
(Company Secretary)
(1693 Points)
Replied 15 March 2012
CA Rohit
(In Practice)
(71 Points)
Replied 15 March 2012
Thanks all of you for updating my knowlede.
Ankur Garg
(Company Secretary and Compliance Officer)
(114768 Points)
Replied 15 March 2012
Originally posted by : Kiranmayi | ||
Our's is a closely held public Company. The investments made by the Company during the current and the previous financial years need previous authorisation by a Special Resolution passed in general meeting. The same has not been done and no forms (Form 23) have been filed with ROC for registration of Special resolutions. Now, kindly clarify, - If I update the previous General meeting minutes to include the authorisations aforesaid, there is no default of Section 372A and as Forms have not been filed penalties mentioned under Section 192 only gets attracted. Am I correct? - If I file all the necessary forms with late fee, am I still liable for penalty mentioned under Section 192(5)? - A specific Special resolution must be passed for every Inter-Corporate Investment/guarantee in excess of the limit, which require separate Form 23s for each investment/guarantee, unless the date of events are within 30 days from the previous event. Am I correct? |
Simply update the previous General meeting minutes to include the authorizations, in order to remove the default of section 372A. Accordingly file form 23 for regn of special resolution with late fee.
If you file all the necessary forms with late fee, you won’t be liable for penalty mentioned under Section 192(5).
Regards