No allotment made by the company...

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Sweta Srivastava (Querist)
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15 March 2012 Please tell for how many days we can keep share application money without making allotment in case of pvt ltd. and can we repay it with interest without any days limit????

Ajay Mishra

Ajay Mishra (Expert)
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15 March 2012 Hi

The companies Act, 1956 not provide any time period about holding of share application money of Indian investor. But in good corporate practice you should allot him first before alloting shares to another.

In case of allotment to NRI you should allot him with in 180 days from the receiving of money as investment.

Regards

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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15 March 2012 RBI through FEMA prescribes 180 days in case NRI'S are involved. So as good governance , 180 days can be followed since law is silent on the raised issue.

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Sweta Srivastava

Sweta Srivastava (Querist)
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15 March 2012 and if prvt company not make allotment to indian nationals till d end of year then?

Ajay Mishra

Ajay Mishra (Expert)
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15 March 2012 Hi

If the company issued shares to NRI then he will allot shares to him within 180 days and if allotment is not made within time. you have two options:

1. Either make application for con donation of delay to RBI with sufficient reason. or
2. Refund the investment money within time or pay interest accordingly.

RBI guidelines applicable on both public company as well as private company.

Regards

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Guest

Guest (Expert)

15 March 2012 You can hold SAP as long as you want. There is no restriction on private company for allotment of shares against SAP.

Offcourse public company has to allot shares within 60 days from the receipt of application money and in case the company is not able to allot the securities within the period of sixty days, it shall repay the application money within fifteen days thereafter, failing which it will be required to be re-paid with interest at the rate of twelve percent per annum.

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Sweta Srivastava

Sweta Srivastava (Querist)
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16 March 2012 is rate of interest may differ? or its 12% always.. ?

Thanks all

Guest

Guest (Expert)

16 March 2012 12% is the rate. It doesn't differ.

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Sweta Srivastava

Sweta Srivastava (Querist)
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16 March 2012 AS PER ARTICLES THE % MAY DIFFER I THOUGHT FOR PUBLIC CO.,
PLEASE MAKE ME CORRECT IF I AM WRONG........

Guest

Guest (Expert)

16 March 2012 No Sweta.

AOA does not supercede what is provided in the act/rules.

Rate mentioned in Rules will prevail over what is mentioned in AOA as per section 9 of the companies act.