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whether application money can be received in two?

ankit jain (CS trainee) (152 Points)

16 November 2010

Dear Friends,

Pls guide me whether a pvt co. can receive the application money in more than one transaction for allotment of shares?

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4 Replies

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 16 November 2010

Yes it is very much possible...

In case the Company has already accepted the Share Application Money you may do one simple thing. You may record the above transaction i.e. receipt of share application money and assurance given to proposed allottee in the board meeting minutes.

In other words simple noting of such receipt in the board minutes would be enough. No need to take any kind of approval from any concerned authorities.

Regarding time limit to convert such share application money into capital the law is silent. However as per practice allot share with 6 months of the receipt of application money.

Further collect the share application form from the proposed allottee for your record. You may download the sample share application from the link mentioned below:

/share_files/files_display.asp?files_id=11908

Regards

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CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 16 November 2010

In Private Limited Company section 81 does not apply and therefore it can accept application and allot shares as and when required subject to the provisions of section 3(1)(iii) and within the limits of Authorised Share Capital. Just to file form 2 for allotment within 30 days.