23 August 2011
Receipt of share application money over and above of Authorised capital is not a default at all. Reason being share application money is not in the nature of paid up capital unless and until allotment of share against the share application money.
In other words only after allotment of share you can consider such share application money as paid up share capital. But before passing allotment resolution you have to increase your Authorised capital.
Making application to the company for allotment is just an offer pending acceptance from the company. Without acceptance the same would not be a binding contract for the company. Refer Indian Contract Act, 1872. Company reserves the right to reject the application and refund the share application money with or without interest as per the terms of acceptance of share application money.
23 August 2011
Richank Ji i think Gopal Ji is not concerned about share application money. He is concerned whether Share Capital + Securities Premium ....which is greater than Authorized Share Capital will result in violation of Company Law? And i think there will not be any violation in the given case.
24 August 2011
thank u very very much Sanjay ji for your reply.and thanks to Richank ji also as the point he discussed is also ralated to my query which i have not incorporated and that resolved even without asking. Thank you.
CAclubindia
