SHARE APPLICATION MONEY

This query is : Resolved

sanjay srivastava (Querist)
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14 September 2010 Dear Friends

Can a private company accept share application money from other public company?

All Directors of the both comapnies are common.

If yes then what is importance of section 3(1)(iii)
Regards
Sanjay

Aditya Maheshwari

Aditya Maheshwari (Expert)
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15 September 2010 Yes u can accept.

section 3 states that shares should not be offered to public and no. of members be limited to 50.

Ajay Mishra

Ajay Mishra (Expert)
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15 September 2010 Dear Friend

Yes, a private company can take share application money from public company subject to maximum no. of 50 members as per definition of private company.

Regards
CS Ajay Mishra

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Ankur Garg

Ankur Garg (Expert)
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15 September 2010 Yes a private company can accept share application money from other public company.

If the 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