our company is expected to receive share application money against rights issue in october from our parent. can we utilise the money even before the allotment of shares.
06 October 2009
As is evident that the Company is going to accept 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.
CAclubindia
