could anybody help me please? Authorirised capital of a pvt ltd company is 20lacs,paid up cap-10 lacs,But during the year share holders contributed Rs13 lacs, how should i show this amount in b/s, what would be it's journal entry? and what formality is to follow in ROC?
17 March 2010
The accounting would depend on the nature of contribution made by the shareholders. Ifthe amount has been brought in as loan (interest free or interest bearing), show it as loans from members.
If the amount has been brought in as Share Application money, then show it in that manner. Taking a noting in the Board Meeting that the Company will have to increase the authorised capital before allotment of shares and show the accounts accordingly. I presume that shares are issued at face value and not at premium.
Formalities with ROC will happen for increasing the Authorised Capital (Form No. 5) and allotment of shares (Form No. 2).
For Increase in Auth. Cap., members special resolution is required.
For allotment of shares, Board resolution will suffce.
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