period of share application money

This query is : Resolved

anand (Querist)
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30 December 2009 Dear sir

Please let me know the period that a private company can hold share application money
What is the consequential effect if a company hold the share application money beyond the prescribed period

Arjuna Raina

Arjuna Raina (Expert)
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30 December 2009 120 days, they have to pay interest of excess days i,e. from the due date.

Ankur Garg

Ankur Garg (Expert)
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30 December 2009 Hello,

If Company has accepted the Share Application Money you may do one simple thing. You may record the above transaction i.e. receipt of share application money and assurance given to proposed allottee in the board meeting minutes.

In other words simple noting of such receipt in the board minutes would be enough. No need to take any kind of approval from any concerned authorities.

Regarding time limit to convert such share application money into capital the law is silent. However as per practice allot share with 6 months of the receipt of application money.

Further collect the share application form from the proposed allottee for your record. You may download the sample share application from the link mentioned below:

https://www.caclubindia.com/share_files/files_display.asp?files_id=11908

Regards

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