Become a Govt. Certified GST Practitioner. Batch begins 18th Nov. Register Now!

Penalty for non refunding Share application money

CA Pavithra S (Chartered Accountant) (92 Points)

28 November 2008

Hai,

I have question relating to FEMA and Co.s Act 1956,

If Company has received Rs. 10 Lacs as Share application Money from NRI and after 1 year also not allotted the shares to NRI. Is there any penalty for the company for non refunding the amount?

I want to know the provisions relating to this matter (both FEMA & Co Act)

Advance Thanks.

Reply
Follow
Share

2 Replies

CA Pavithra S (Chartered Accountant) (92 Points)
Replied 03 December 2008

please suggest me penalty for the above as per FEMA

Upgrade to CAclubindia Pro. Subscribe Now!

Kumar (Legal Consultant) (358 Points)
Replied 04 December 2008

Dear Pavithra,

No provision of penalty is there in the FEMA.But company which had received such amount has not reported the amount received from the NRI then in that case compounding shall be attracted in terms of section 13 read alongwith section 15 of FEMA Act.

Under FEMA Regulation 6months time is given to allot the shares.If that is not the case then company has to return the money through the Authorised Dealer or bank.

regards,