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share issue after Incorporation

30 December 2018

can anyone tell me that in how many days a company has to issue shares and receive payment for that issue, for date of incorporation...if any company does so after 3.5 months, any consequences...

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3 Replies

Ruchika Somani (Coaching and Practice in Tax Audit Law) (4429 Points)
Replied 31 December 2018

Shares shall be issued within two months of incorporation

Jatin Bajaj (CS) (2930 Points)
Replied 01 January 2019

As per Section 56(4) of the Companies Act 2013, every Company shall allot the shares to the subscribers of the memorandum of the Company within 60 days from the date of incorporation of the Company.

Failure to comply with the provisions of the Companies Act within the time limit shall lead to the fine of Rs. 5000/- subject to the maximum of Rs. 25,000/- and every officer of the Company shall be punishable with the fine of Rs 10,000 which may extend to Rs. 1,00,000/-