28 April 2010
whether there is any time limit to convert share application money into share capital.
problem is one of company is stating large amount as share application money in his balance sheet for long time. is it permissible to not to convert such money within any time into share capital?
28 April 2010
In Companies Act there is no time limit for keeping share application money but as per Listing agreement it should not be more than 1 year.
Hence it is advisable to make allotment within 1 year of receipt of application money. However, if kept for more time than there is no non compliance but ROC may raise query on basis of Form 23AC file & balance.
28 April 2010
More over if the share application money is received from a non-resident, shares must be allotted with in 180 days therefrom other wise the money has to be returned as per Foreign Exchange Managemenr Act.
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