Query under companies act, 2013

This query is : Resolved

GYAN RANJAN (Querist)
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29 January 2015 Case details:-

Company has Share application money (pending allotment) for the years ending 31.03.2012, 31.03.2013 and 31.03.2014.
Now Company has received a Show cause notice from ROC dt-23/12/2014 stating that there is a violation under section 205C of Companies Act. Because company has neither filed a form 5INV nor has done any treatment for the same in the previous years.
Acc to me now that the money is in the balance sheet for so long, it must be considered under the definition of Deposits.
Query:-
• Can I allot the shares?
• If yes, What is going to be the procedure?
• If no, what is the possible outcome?
• If it is a case related to Deposits, what is going to be the procedure for Refunding?
• Which form is required to be filed with MCA?
• What will be the rate of interest?
• How much Fine penalty will be attracted under Companies Act, 2013 for the same?

Kaustuv

Kaustuv (Expert)
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29 January 2015 As you would know, shares have to be issued within 60 days of receiving the application money as per Companies Act 2013 which is effective 01/04/2014. Now, if it is not so allotted, it would be treated as deposit and the result is catastrophic for the quantum of fine involved. Any pre-existing deposits as on 01/04/2014 would have to be repaid back within 31/03/2015. There is an eform DPT-4 for notifying ROC about pre-existing deposits.