15 November 2010
Is there any time limit for keeping share application money pending allotment. In other words for how long we can retain the share application money without making the allotment of equity shares?
15 November 2010
As is evident that 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:
If you have received FDI against equity you should allot shares within 180 days from the receipt of inward remittance or credit to your account otherwise you refund the same money.
Agreed with Ajay Sir! No limit is prescribed under the Companies Act, 1956 and the FDI Circular issued by RBI on 01.07.2010 provides for the allotment of shares within 180days of receiving the FDI against equity.......
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