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How its Possible

CA Navin Jain (MANAGER (FINANCE & ACCOUNTS)) (11768 Points)

30 October 2010

A company incorporated in sep 2008 with authorised capital of Rs 1,98,00,000 divided into 19,80,000 shares of rs 10 each. members subscribed for 10,00,000 shares in MoA. Now the balancesheet of company is showing paid up capital 99,00,000 divided into 9,90,000 shares.
is it possible that paid up capital can be less than the capital subscribed in MoA at the time of incorporation

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7 Replies

Ajay Mishra (Company Secretary) (74337 Points)
Replied 30 October 2010

As per my understanging, no. of shares shown in MOA will be treated as paid up capital unless further allotment has not been made by company.

Regards

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Amit Gupta (Loosening Myself) (1508 Points)
Replied 30 October 2010

Originally posted by : Ajay Mishra
	Hi As per my understanging, no. of shares shown in MOA will be treated as paid up capital unless further allotment has not been made by company. Regards

Amit Gupta (Loosening Myself) (1508 Points)
Replied 30 October 2010

Originally posted by : Ajay Mishra
	Hi As per my understanging, no. of shares shown in MOA will be treated as paid up capital unless further allotment has not been made by company. Regards

Dileep_Matham (Member of GST Team) (67 Points)
Replied 30 October 2010

Rs. 1,00,000/- might be share application money which is not alloted yet !!

Ajay Mishra (Company Secretary) (74337 Points)
Replied 01 November 2010

Dear Dileep

At the time of incorporation, the provisions of share application will not apply, because the company is not in existence.

Regards

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Bijendra (Service) (31 Points)
Replied 01 November 2010

Subscribed capital is basically the proceeds that the promoters/shareholders have “agreed” to pay for the shares. The subscribed capital transforms into paid-up capital when the shareholders actually make the cash payment that they agreed to pay.

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 01 November 2010

No, it is not correct.

In this case, the paid up capital in the balance sheet must be 1 Cr.divided into 10,00,000 shares.

Because in MOA 10,00,000 shares are shown as subscribed. It is considered as deemed allotment. No further formal allotment in this regard is required.