Kunal (Service) (65 Points)
08 December 2010Abc Pvt Ltd is incorporated with a paid up share capital of 1 lakh. The promoters do not want to open a bank account for at least 2-3 years (as the company will not undertake full fledged activities).
Can the initial capital be bought in cash and shown as cash in hand for 2-3 years?
Rahul Gupta
(Chartered Accountant)
(644 Points)
Replied 18 December 2010
As per the Accounting Rules, I think it's possible to raise the capital by the way of Cash by debiting its Accounts.
Whereas when we consider the part of Law, it doesn't allow so.
CA Ankit Gulgulia (Jain)
(B.COM (H) FCA CIFRS CBV R-ID (IICA) )
(5842 Points)
Replied 18 December 2010
Dear Kunal ,
Go Ahead With the transaction - There is No Debar over it from Law and Accounting Rules. Also Refer (to Substantiate my Conslusion) - DCA in its circular No. 8/32(75) 77-CL-V dated 13th March, 1978
Regards
Ankit
CAclubindia
