Receipt of Share Application money

Page no : 2

Mitali Agarwal (Company Secretary) (638 Points)
Replied 30 January 2010

Thanks a lot Sir for your reply.

But I would like to confirm that when authorised & issued capital is = paid up capital, then how the co. can issue and invite more applications? OR Can any person make an application to co. for issue of shares without shares being issued by the Co.?

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Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 30 January 2010

Making application to the company for allotment is just an offer pending acceptance from the company. Without acceptance the same would not be a binding contract for the company. Refer Indian Contract Act, 1872. Company reserves the right to reject the application and refund the share application money with or without interest as per the terms of acceptance of share application money.

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 30 January 2010

Apologies for not so detailed reply as today am a bit busy due to my board meeting and commitee meetings for the adoption of Q3 results. Regards

1 Like

Mitali Agarwal (Company Secretary) (638 Points)
Replied 30 January 2010

Thanks Sir and no need to apologise. Your this reply is sufficient for us to understand and have the solution to the query.

CS. Ashish Shah (Service) (175 Points)
Replied 30 January 2010

Mitali, I agree with Cs. Ankur Garg, you can accept the share application money without being increasing the authorised capital, however, you cannot allot the shares against the share application money so received, unless the authorised share capital increased. So before the time of allotment of shares, you need to increase the Authorised Capital. Further as far as EGM is concerned it can be held anywhere, I say anywhere in the world like Board Meeting. It can be hold even on public holiday and out of the business hours like at 7.00 p.m. or so. The restrictions provided in Section 166 is applicable to AGM only.