One of our company having application money on hand wants to convert it into Unsecured Loan. It is possible right?
Resolution of Board and consent of applicant is sufficient for the purpose??
4 Replies
Vandana J Doshi
(Practising Company Secretary)
(12562 Points)
Replied 09 August 2014
No Ekta, in my view, it isa not possible....Howver, the company can refund the application money and re accept the same in the form of an unsecured loan.....but to convert the application mony directly into unsecured loan is not correct.....
Lets wait for others views....
RoHaN k
(CA & CS)
(308 Points)
Replied 09 August 2014
No Share Application money can not be converted into unsecured Loan
You can search for a case law : Bharti Airtel Vs ACIT [ 11.3.14],
In new Companies Act 2013 , Share Application money should be alloted in prescribed time or to be refunded.
Ekta
(Practicing CS)
(423 Points)
Replied 11 August 2014
Ohk.. Got it.. Thank you Vandana and Rohan. :)
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