We are Pvt Ltd company, asper our balance sheet as on 31-3-2011 FY(2010-11), we have Authorised Share Capital Rs.10Cr Issued share capital Rs.9.01Cr Share application money Rs.10.62Cr, My Query 1) whether amount wise issued share capital vs share application money is right or wrong.
If wrong, what we have to do to rectify the same in FY 2011-12
Query 2) whether amount wise authorised share capital vs share application money is right or wrong.
If wrong, what we have to do to rectify the same in FY 2011-12
I case of Private Limited Co. the Act is silent in case of accepting Share Application Money, but as per normal practice one should allot share application money within 180 days from accepting the same. In your case you have to increase your Authorised Share Capital first later you can allot the shares.
In Balance sheet the share application money pending allotment should be treated as current liabilities till the allotment.
The amount wise all situations were right if you follow the above general rules.
20 July 2012
Hi, Mr Anonymous, Kindly look, frankly saying the Companies Act, 1956 is silent in case of Share Application Money in Private Limited Co. There were lot of contrary views in discussion about share application money.
You can kept such SAM in current liabilities (but not in share capital). And the Interest on such amount shall be regulate by the mutual agreement between Co and Alottes. You can pay if decided. And it is not mandatory to refund the same within 180 days (I said it is a general practice not compulsion).
20 July 2012
First of all the company can not accept share application money more than its authorised capital. It has to return the application money or increase its Authorised Share Capital.
Secondly, in case of unlisted public companies, Ministry has issued a notification in dEcember 2011 and mandated that the company cannot keep share application money more than 60 days.