Share application money

Even if no period was specified in CA 196, shares should be allotted within a reasonable  period.  Application for shares is addressed to the Board and Board cannot keep it pending indefinitely without any decision.  Board should either allot or  refund  the  amount.

In any case, considering intention of the law, it will be advisable to  either allot the shares or refund the amount within 60 days from 1.4.2014.

I think MCA may notify on it soon.

Though there is no specification regarding share application money outstanding as on commencement of the CA, 2013, In Companies (Acceptance of Deposits)Rules, 2014, in rule 2 sub-rule (vii), in its explanation it is clarified that, "any applicatio money was received can not be allotted within sixty days from the date of receipt of the application money or advance fro such securities and such application money or advance is not refunded to the subscribers within fifteen days from the date of completion of sixty days, such amount shall be treated as a deposit under these rules."

It means any application money outstanding as on the date of commencement of this Act, if the same is not refunded within 60+15 days, will be treated as deposits under acceptance of deposits rules.

Experts comments are invited.

Is the Rule 2(Vii) applicable to private Companies.