Joseph Samuel (Accountant) (75 Points)
01 August 2019Dear sir/madam,
Can a Managing Director of a Pvt Ltd company pay his share capital amount via cash? For example if 70% of shares hold by MD. In that for 30% of shares he made payment via bank (company account). And the remaining amount he paid via cash, I mean't he/she directly bring that cash amount into business. And the accounting entry is been like [Cash A/C 'Dr', Share allotment A/C 'Cr']. Can we do like this?
Jatin Bajaj
(CS)
(2930 Points)
Replied 02 August 2019
Subject to the provisions of Section 42 of the Companies Act 2013, there is the separate account for receiving the share application money. Application money received towards the allotment of shares via private placement shall be kept in a separate bank account of the Company. But money received through right issue shall also be made thrrough cheque. No cash transaction is permitted.
25 Hours GST Scrutiny of Return and Notice Handling(With Recording)
Survey, Search and Seizure under Income Tax Act 1961
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