Section 81 of companies act, 1956

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CS Monika Sankhla (Querist)
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10 September 2013 The Company have received capital contribution from one of its share holders on 30 april,2013 now the Company wants to issue shares as per Section 81 of Companies Act, 1956. The Company is an unlisted Company, the Unlisted Public Company (preferential) allotment (amendment) Rules 2011 is applicable. but any allotment of securities shall be completed within the period of 60 (sixty) days from the date of receipt of application money and in case the Company is not able to allot the securities within the said period of sixty days, it shall repay the application money within the period of fifteen days thereafter, failing which it will be required t be repaid with interest at the rate of 12% per annum. Considering the said provision, the Company does not want to repay the amount and want to issue shares on the said contribution.Please give your advice whether it is possible to issue share for the contribution received in April 2013 under the provision of the Companies Act, 1956? If yes then please elaborate the procedure for allotment of shares.

Ajay Mishra

Ajay Mishra (Expert)
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10 September 2013 Hi

I will suggest you to call and Board Meeting for EGM to issue shares of the proposed Investors.

The ROC will not demand you about bank statement or any prof about it.

So issue shares in June to the proposed Investor and there after allot the same.

CS Monika Sankhla

CS Monika Sankhla (Querist)
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10 September 2013 But the Company is a Government Company(Limited) and can issue share only as per the provision of the Act.

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Ajay Mishra

Ajay Mishra (Expert)
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10 September 2013 Then you can not do allotment. In that case you will return the money.

CS Monika Sankhla

CS Monika Sankhla (Querist)
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10 September 2013 But the Company does not have money (including interest) to pay to the shareholder.