manju (ACS FINAL STUDENT) (75 Points)
04 August 2009my query is - a pvt ltd co. having authorised capital of rs.1000000 and paid up capital also rs.100000, can have share application money of RS.6600000 withour increasing authorised capital? here there is no intention to allot shares against share application money.it is just an internal adjustment which the company wants to make in the balance sheet. and what is the procedure to return the application money whether needed egm or agm?
CS GK Murty
(Company Secretary)
(225 Points)
Replied 04 August 2009
where authorised cap is 10 lac and paid up is 1 lac as per your verse, how can share application money stand at Rs. 66 lac? even if this is an internal affair, board has to pass a resolution in respect of allotment. without allotment, there is no question of receipt of application money.
It is not valid.
When the ROC detects this then it will fined the company.
Because Share Application money has to be returned. If there is no intention of allotment of share.
see Raymond India Ltd. case in this matter.
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Ankur Shah (Practicing Company Secretary)
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Malav Shah
(Company Secretary and AVP Legal)
(171 Points)
Replied 05 August 2009
Hi
Though Co. Act, is silent regarding the refund of share application, it is not justified to have share application money for long time. Share application money cannot be utilised by the company for business purpose. It has to be refunded. A discusion on Share application money is attached. This will help you.
Regards
Malav
Ashis Mahapatra
(Consultant-Tax & FEMA/FDI)
(183 Points)
Replied 06 August 2009
| Originally posted by :vasuki | ||
| " | my query is - a pvt ltd co. having authorised capital of rs.1000000 and paid up capital also rs.100000, can have share application money of RS.6600000 withour increasing authorised capital? here there is no intention to allot shares against share application money.it is just an internal adjustment which the company wants to make in the balance sheet. and what is the procedure to return the application money whether needed egm or agm? | " |
The answear given by other freinds are correct.But be careful for one thing that if money received from a Non resident or NRI through foreign Exchange, then it shuld necessarily be refunded within 6 month or 180 days from date of FIRC otherwise it will be treated as a contravention of FEMA and proceeded for Compounding/penalty
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