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Time for allotment of shares

ashish gupta ( student) (1922 Points)

09 December 2011

is there any time limit for allotment of shares for a pvt ltd company. share application money is standing in the balance sheet since 31st march 2011.

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10 Replies

Rashi Tiwari (Company Secretary) (131 Points)
Replied 09 December 2011

If share application money is received from abroad we need to allot shares within 6 months from date of receipt of money. As far as i know there is no such time limit for share appplication money received from India.

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ashish gupta ( student) (1922 Points)
Replied 09 December 2011

thanks for the prompt reply. application money is only from India.
is there any limit on use of the application amount in the business

Rashi Tiwari (Company Secretary) (131 Points)
Replied 09 December 2011

Share application amount can be used only when shares are alloted and it becomes capital of the company.

Dear professional friedns please correct me if i am wrong.

Parashar (Company Secretary 2004) (1013 Points)
Replied 09 December 2011

There is no time limit for allotment of shares in a private company, certainly it should be done before the end of the financial year so that it would not stand in your Balance Sheet.

ashish gupta ( student) (1922 Points)
Replied 09 December 2011

but can we utilise the amount of share application money in business

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(Guest)

Yes, Mr. Ashish it can be utilised for any business purpose. Also there is no time limit within which shares should be issued. But as per good secretarial practice shares should be issued in reasonable time period (3 to 6 mnts)