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Subscripttion of capital in a company

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charudatta

auditor

191 Points Posted on 03 April 2014

When a new company is formed, the min cap is Rs 100,000 in case of a pvt ltd co.

But actual inflow/outflow of funds (cash/bank) can not be seen as capital contribution by directors.

What JV should be passed in books of a/c?

Another query is that can a director bring his land (20 years old) as his capital.?

(Its purchase price was 69500 but fair market value is rs 350000.)

if so then what amount should be recorded in books??

Replies (1)

Binod Padhi

Auditor

52 Points Posted on 04 April 2014

The question you asked is mostly related to closed held companies by directors who are not exposed to public contributions.The capital can be contributed in 3 ways cash/bank,services,property/asset. If you want some fair entry then contribution through services towards capital can be entry. For ex if for establishing business you have done your expenses then that services provided can be considered as capital. If cash or bank entry then its easy to draw JE Yes of course property at fair value can be considered as capital.If the fair value is debatable you can take help of expert to derive property value. Property includes land,building,equipments etc cash/bank,services,property/asset a/c Dr To Shareholders capital a/c