Share application money

This query is : Resolved

Ramki (Querist)
Follow

28 January 2016 A company has Rs 25.00 Lakhs authourised share capital fully subscribed. It had enhanced its Authorized share capital to Rs 40.00 Lakhs. The existing share holders have paid Rs 15.00 Lakhs which is kept as share application money in the B/S. The present share holding pattern changes once new shares are allotted.
What is the legal status of this share application money? When we call for an EGM do this share application amount has to be taken in to account or only allotted shares?

Pratik Shah

Pratik Shah (Expert)
Follow

28 January 2016 In EGM, share application money can not be considered for voting. Only paid-up capital shall be considered.

you have not mentioned the date on which the share application money has been taken. As per rules, share application money shall be returned if the shares are not allotted within 2 months (60 days) from the date of receipt of such amount.

Hence, in your case, if the share application money has been received and you have not allotted shares within 60 days, then the company has done a non-compliance.