Is it mandatory to receive share application money in cheque of DD under companies act or any other act.
Whether it can be received in cash by a private limited companies, please clarify.
2 Replies
CA Himanshu Khurana
(Chartered Accountant)
(813 Points)
Replied 01 July 2011
it is mandatory Share application money in form of Cheque Or DD
Jaideep
(Service)
(1368 Points)
Replied 02 July 2011
It can be received in cash also...however where the transction amount exceeds certain limit, different acts will attract or may bring trouble,
Say for e.g if amount exceeds prescribe limits under Banking Transaction it will be informed to IT department and so on...
As per IT Act, applicant has to provide declaration for the amount subscribed for (in case of Private company and preferential allotment)...
Companies Act has not mandated share application money in cash, even statutory register provides column for the same, however looking at Business Convineance , Banking and IT related matter it is always suggested to take money in Cheques specially when amount involved is high...
Also note Its mandatory for the Companies coming for IPO and where-ever ICDR is applicable .
Regards
Jaideep Pandya
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