aditya paliwal (Business) (31 Points)
18 February 2010what are the provisions regarding share application money in companies act or accounting standards/ifrs ?
can we carry the same amount of application money without alloting shares for next and subsequent years ( please submit the answer along with relevant provisions)
Jagruti (CS)
(Service)
(1953 Points)
Replied 18 February 2010
In Companies Act, there is no provision for keeping of share application money. However as per Listing agreement Company cannot keep application money for more than 6 months.
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 18 February 2010
In case the Company has accepted 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 and as per FEMA regulations allot share with 6 months of the receipt of application money.
Further collect the share application form from the proposed allottee for your record. You may download the sample share application from the link mentioned below:
/share_files/files_display.asp?files_id=11908
Regards
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 18 February 2010
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