A private company having a Authorised Share Capital which is fully subcribed plans to issue additional equity share capital and has received the share application money for the same.
Now until the authorised share capital is increased it cannot allot additional equity shares but pending the increase in authourised capital can it utilise the share application money.
Please also advise what steps should the company follow on receipt of the share application money specially if the same is a FDI
Plz Check the following:
a) Whether the FDI is falling under automatic route or approved route
b) Whether the amount is received through a designated bank (category-1 bank)
c) If so, whether you have received FIRC(Foreign exchange inward remittance certificate) from bank
d) whether you have received UIN from RBI for such remittance
e) let the amount be kept with the banker until allotment is made since the amount so received should not be used for any other purpose until the allotment is made.
e) Within 180 days from the date of allotment, compliance under FEMA is to be made.
Plz bear in mind, for non-compliance of provisions under FEMA attract huge penalties.
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