Pankaj Arora (Learner) (3134 Points)
17 January 2012
I want to know that our promoter want to infuse money by prefential allotment in public ltd. Co. we are going to
issue shares on Rs. 90 premium. Our company is strugling from liquidty.. As per section 78 of companies act that
security premium can be used for issuing bonus shares, partly paid up shares into fully paid shares and so one... so
i want to know that can we use this security premium account for working capital?
CA Sunil Kumar Parjapati
(ACA Senior Manager- Accounts & Finance)
(224 Points)
Replied 17 January 2012
No Pankaj, You can only use that money as per the condition and area given in section 78.
Pankaj Arora
(Learner)
(3134 Points)
Replied 17 January 2012
can public ltd co. take loan from promoters ? I think yes bu let me know under which section co. can take loan…
and second query we can not use security premium amount for working capital can we use prefential equity
amount for working capital?
Dear Pankaj,
1. Yes, public ltd co. can take loan from DIRECTORS of company. It is not covered under Deposits u/s 58A. Acceptace of loan from director is covered under exceptions in Acceptance of Deposit Rules.
2. Yes, you can use prefential equity amount for working capital, there is no restriction whatsoever.
Thanks
Pankaj Arora
(Learner)
(3134 Points)
Replied 18 January 2012
thanks neha.. One more query in our another pvt. Ltd. Co. we want to convert loan taken from directors into
equity.. We will convert loan into equity @ premium but as per section 78 security premium amount should be
deposited in separate account so I want to how will it possible since we have already taken loan from directors
how will we could keep it in security premium a/c?
| Originally posted by : Pankaj Arora | ||
 |
security premium can be used for issuing bonus shares, partly paid up shares into fully paid shares and so one... so |
 |
As per section 78(2), sec prem can not be used for making partly paid up shares into fully paid shares.
Pls read section 78 (2) carefully.
As far as your query is concerned, Pass following entry at the time of conversion of loan amount into equity :
LOAN A/C DR. 1.00 CRORE
TO SHARE CAPITAL A/C 10.00 LACS
TO SECURITIES PREMIUM A/C 90.00 LACS
Pls post if you have any other query regading this.
Thanks
Pankaj Arora
(Learner)
(3134 Points)
Replied 18 January 2012
|
Dear neha thanks for explanation of section. |
|
I am not asking for posting entry of conversion loan into equity.. |
|
I am asking is there any section in companies act that says security premium should have in separate account so that we could use it for specific purpose given in section 78. |
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17853 Points)
Replied 18 January 2012
Dear Pankaj,
Yes you can issue shares to promoter group at premium on preferential basis for this you need to pass special resoltion and give the justificaiton of amount and comply with the Unlisted Public Companies Preferential Issue guidelines.
You can take deposits from directors and their relatives as well, however deposits from directors will be considered as exempted deposits.
Pankaj Arora
(Learner)
(3134 Points)
Replied 18 January 2012
|
thanks neha and ankur ji |
|
could you pls give me file on Unlisted Public Companies Preferential Issue guidelines.? |
PFA as desired.
First file was amendment 2011 guidelines and this one is original 2003 guidelines
CAclubindia
