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Shares Certificate

Abhay Jain (7 Points)

04 May 2023

Whether new Company can issue shares to subscriber of memorandum without actual receipt of money

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3 Replies

Jatin Bajaj (CS) (2928 Points)
Replied 05 May 2023

As per section 10 A of the Companies Act 2013, a Company incorporated after the commencement of the Companies Amendment Act 2019, and having a share capital shall not commence any business or exercise borrowing powers unless a declration is filled by the Company in form INC 20 A within a period of 180 days from the date of incorporation of the Company by stating that subscriber to the memorandum of association that subscriber to the memorandum of association has paid the value of shares on the date of making such declaration

Abhay Jain (7 Points)
Replied 05 May 2023

I have a query regarding issue of shares which needs to be issued within two months from the date of incorporation
Whether shares can be issued without actual receipt of money

Chirag (Professional) (1979 Points)
Replied 12 June 2023

Technically Yes ,Because by subscribing their hands on MOA/AOA ,they agreed to become shareholder of company ,non payment is seperate method in which case forfeiture can be done , but @ Jatin is also right you have to prove to MCA in INC 20A that subscriber has paid money ,actually it was a wrong practice for sometime that subscriber never pay any single penny and get shares regd .in their name...