Can share application money be paid in cash under Companies Act 1956/2013??
Thanks in advance.
3 Replies
P C Agrawal
(Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad)
(8229 Points)
Replied 11 February 2014
Rule 8(3) of Unlisted Public Companies (Preferential Allotment) Rules 2003 prohibits this.
Still Learning
(cs)
(234 Points)
Replied 11 February 2014
Im sorry I should have mentioned this in the question.Will it be allowed in a private company?
P C Agrawal
(Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad)
(8229 Points)
Replied 12 February 2014
As of now, there is no restriction as such for private company. Section 42(5) of Companies Act 2013 prohibits share application money in cash. However, this Section has not yet come into force.
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