Company law

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 March 2013 Please guide me reg
1. In a com incorp the paid up cap of 5lacs,whn is the entry for share money rec passed.

2. The shares alloted are not in ascending order ie. the distinctive nums, the new allotment is done and the subscribers hav received cert. of num after the new allotement. What is to be done
?/

Ajay Mishra

Ajay Mishra (Expert)
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07 March 2013 Hi

In accordance with the provisions of section 36(2)of the Companies Act, 1956, all money payable by any member to the company under the MOA or AOA shall be debt due from him to the company. Further, a subscriber to the memorandum must pay for his shares in cash even if the promoters have promised him the shares for services rendered in connection with the promotion of the company.

CS. Ashish Shah

CS. Ashish Shah (Expert)
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07 March 2013 Dear,

Answer to your queries are as under:

1. There is not time limit provided under the Companies Act, 1956 for giving the share application money by the subscribers to MOA and AOA. However, for all practical purposes, it is advisable that within seven days time from the date of getting the Certificate of Incorporation from ROC, the money should be received in the Company and entry for the same needs to be made.

2. Kindly elaborate your query.

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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19 July 2024 If the shares allotted are not in ascending order of their distinctive numbers (which typically refer to the serial numbers of share certificates), it can lead to confusion and potential issues during share trading or transfer. Here’s what should typically be done in such a situation:

1. **Rectification by the Company:**
- The company should rectify the situation by re-issuing the share certificates in the correct order of distinctive numbers.
- This involves cancelling the incorrectly issued share certificates and issuing new ones with the correct distinctive numbers.

2. **Steps to Follow:**
- **Identify the Incorrect Certificates:** Determine which share certificates have been issued out of sequence.
- **Cancellation:** Cancel the incorrectly numbered share certificates. This involves marking them as cancelled and maintaining records of the cancellation.
- **Issue Correct Certificates:** Issue new share certificates with the correct distinctive numbers in ascending order.
- **Communication:** Notify the shareholders about the rectification process. Provide them with the new share certificates with correct distinctive numbers.

3. **Legal and Compliance Aspects:**
- Ensure compliance with the Companies Act and other relevant regulations governing the issuance and cancellation of share certificates.
- Maintain proper records of the cancellation and issuance of share certificates for audit and compliance purposes.
- If required, seek guidance from legal or regulatory advisors to ensure the process is carried out correctly.

4. **Shareholder Communication:**
- Inform shareholders promptly about the rectification and provide them with the new share certificates.
- Address any concerns or queries they may have regarding the process.

5. **Future Compliance:**
- Implement procedures to avoid such errors in the future. This may include improving internal controls over the issuance of share certificates and maintaining accurate records of distinctive numbers.

In summary, correcting the share certificates to ensure they are in the correct ascending order of distinctive numbers is essential to maintain compliance and avoid confusion among shareholders. The process involves cancelling the incorrect certificates and issuing new ones with the correct sequence of distinctive numbers, followed by proper communication and documentation.