Share application money beyond authorised capital

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Nikhil Agrawalla (Querist)
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14 January 2013 Can a Private Company accepts share application money beyond its authorised capital?
If its authorised Capital is 1 crore and paid up capital is 80 lakh, then can it accepts Share Application money to the tune of Rs.40 lakhs or above.
If yes or no, please help me with any decided case.
And what is the time frame to allot or refund share application money in case of Private company?

CS Ankur Srivastava

CS Ankur Srivastava (Expert)
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15 January 2013 First of all the company should increase its authorised capital to accept such application money.

In case of private company there is no specific rule for repayment of such application money.

However, in case of public company w.e.f. last december, shares must be allotted within 2 months or money shall be returned.

Nikhil Agrawalla

Nikhil Agrawalla (Querist)
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15 January 2013 But the client is asking that there is no such conditions in Companies Act regarding Share application money beyond Authorised Capital. Can you help me by mentioning any case law for the given situation?
One more thing Sir, this time limit of 60 days if for all public companies or only for unlisted companies?

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C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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23 July 2013 There is amendment in the act so be careful and if you continue to show as share application then you might have to face some problem from IT other I agree with the expert