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Share Application money pending allotment

sakshi (CS) (261 Points)

26 February 2011

Dear Professionals

Please guide me.

Upto what time can the share application money pending allotment be witheld in the balance sheet in case of an unlisted public company and will it be treated as the deposit anyway?

Regards

Sakshi

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5 Replies

udit sharma (Company Secretary) (2303 Points)
Replied 26 February 2011

Hi...

To the best of my knowledge there is no such time period prescribed under the Companies Act, 1956 or the rules framed thereunder within which the shares have to be allotted. As a prudent practice and as per what has been prescribed under the FDI Master circular issued by RBI, shares must be allotted within 180 days from the date of receipt of share application money.

As per section 113 of the Companies Act, 1956 share certificates must be issued within 3 months from the date of allotment.

God Bless

CS Udit Sharma

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udit sharma (Company Secretary) (2303 Points)
Replied 26 February 2011

As per the provisions of section 205C of the Companies Act, 1956 any share application money pending allotment for a period of 7 years or more is to be transferred to Investor Education and Protection fund.

Priya Sharma (Company Secretary & Student.MBA) (998 Points)
Replied 26 February 2011

But Sir in th present query, shares have not been alloted yet, so there is no point of Section 113 coming into the picture.

Regards

Priya

udit sharma (Company Secretary) (2303 Points)
Replied 28 February 2011

Priya

My second para of first reply was given only for the information of querist, if required.

I have answered the query posted very well in my first para and in case it is wrong please quote the same. I never said that the second para was answered as reply to the query posted but was provided simply for her knowledge, in case required.

God Bless

CS Udit Sharma

Hiren (Asst. Manegers) (139 Points)
Replied 02 July 2013

sir , in case of Share application money is paid to company outside India (Eg.USA) for a purpose of valuation date it is monitories / non- monitories item