Should the share application money of newly incorporated companies be deposited in a separate bank account? This appliaction money is towards the first shares issued by the company. Section 42 of companies act 2013 speaks of Private placement which is to increase the existing capital base. But what about the application money of initial shares?
Yes. It has to be deposited in a separate bank account within 30 days.
No, consideration for subscripttion shares need not be deposited in separate Bank account. It can be deposited in regular bank account of the company and used for business purpose. The requirement of separate account is applicable only to private placement of shares u/s 42.
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
View Details
CAclubindia
