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Share application money private limited company

03 February 2021

If a private limited company is carrying share application money in its balance sheet for 4 years..what is the remedy.what can be done under ca 2103.pls advice with extract of the act

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Roshni (Trainee) (34 Points)
Replied 06 February 2021

Rule 2(1) © (vii) of Companies (Acceptance of Deposit) Rules 2014 reads as follows:

“deposit” includes any receipt of money by way of deposit or loan or in any other form, by a company, but does not include

(vii) any amount received and held pursuant to an offer made in accordance with the provisions of the Act towards subscripttion to any securities, including share application money or advance towards allotment of securities pending allotment, so long as such amount is appropriated only against the amount due on allotment of the securities applied for;

Without prejudice to any other liability or action, if the securities for which application money or advance for such securities was received cannot be allotted within sixty days from the date of receipt of the application money or advance for 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.