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Valuation of shares for funding

Others 253 views 2 replies

sumit

intern

43 Points Posted on 29 March 2022

a private limited company having authorised capital of 1 lac with 10000 shares...has raised funding of 1 crore by giving 5 pcnt equity.

now how to enter the funds received in books of accounts...and how to make share transfer agreement as our shares are of only 500 of rs 10(5% of 10000). which is 5000 rs ...but amount received is 1 crore...do we need to increase the authorised capital or issue share on premium.

Replies (2)

prasad Nilugal

GST Practitioner & Accounts

15093 Points Posted on 29 March 2022

You can not issue shares more than Authorised share capital , So First you have to increase your Authorised Share capital .

Kev Men

790 Points Posted on 12 April 2022

The face value of the shares is Rs. 10. So total shares to be transferred is of face value of Rs. 5000/-. The balance amount received being Rs. 99,95,000/- (1crore-5000) can be transferred to securities premium account.

Entry in books of accounts will be:

Bank A/c Dr. Rs. 1,00,00,000/-

To Equity capital A/c Rs. 5000/-

To Securities premium A/c Rs. 99,95,000/-