Share allocation without investing cash

Pvt ltd 351 views 1 replies

Hi ,

I would like to register a private India limited company with following constrains / objectives in mind.

1) In two years period company involves in only Research related activities ( R& D) in software development.  

2) The total money for the two years research will be funded by my friend , money inflow to the company would be tentatively like this in two years.  

1ST Term : 10 L

2nd Term : 25 L

3rd Term  : 60 L

3) At the end of the 2 years my friend should get 49 % of stakes and I should get 51 % stakes .

How to allocate the shares to my friend and how should we show it in the books , because I am not directly investing the money ( I am involved in all bussiness development activities and reserch ), all the money is funded by friend only , in that case how should i get 51 % shares.

Please help me out 

Thanks & Regards

Uma 

Replies (1)

without investing money, no person can get shares of the company except by way of ESOP or Bonus Shares. 

So in the first instance at time of incorportating the company, you should also invest 51% money of total share capital and let your friend invest 49% of shares. Thius is the only way now to get the 51% stake in the company


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