LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Paid up capital

CS Sheetal Mayekar (Practicing Company Secretary) (125 Points)

13 November 2018

While incorporation, paid up capital shown as ₹5,00,000/- which is not available with shareholders to deposit in bank account.
How it will be verified?
Can we follow calls on share?
Or We need to decrease paid up capital ?

Reply
Follow
Share

5 Replies

divya vyas (73 Points)
Replied 13 November 2018

You can show it in cash and you can issue share certificates as for now and at the end of year you can show that the shareholders have paid in cash

1 Like

CS Sheetal Mayekar (Practicing Company Secretary) (125 Points)
Replied 13 November 2018

Can some amount deposit in bank..lets say 50,000 n bal 450,000 paid to purchase machinery n all ?

divya vyas (73 Points)
Replied 13 November 2018

but paid up capital means the amount which is received against purchase of shares... how can you buy machinery from that capital ?
moreover if you you are transferring 50000 in bank account then keep 50000 as your paid up and rest of the amount you can show in form that you have purchased machinery before incorporation

CS Sheetal Mayekar (Practicing Company Secretary) (125 Points)
Replied 13 November 2018

actually company incorporated before it came to me for AM
as You said I will show shareholder paid 500,000 in cash
but can company use it to purchase machinery...that is my question
as per accounting view

Hari Prasad Sharma (Student CA FINAL) (27 Points)
Replied 18 November 2018

Yes you can purchase the machinery on credit basis and show the vendor account under the head Other long term liabilities or long term borrowings( based on your credit terms) in the balance sheet. And there is no need decreasing any share capital.

1 Like