04 September 2009
After accepting 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.
The time lag of 6 months is applicable only if the money received is FDI. Bcz FEMA requires allotment to be done within 180 days. In all other cases there is no such practice which is being followed.
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