Section 42 (6) mandates allotment of shares within 60 days of receipt of share application money and if it is not allotted, money shall be refunded within 15 days. File PAS-3 within 30 days of allotment with the following attachments: • Certified true copy of resolution of allotment • List of allottees (as per the format) 8. After the application of this sec, even private limited company will not be able to receive application in cash, will have to open separate bank a/c to receive share application money and will not be able to utilize the share application money unless shares are allotted. If Company is private limited, penalty will attract since it can’t accept deposit other … Regards of shares which would be allotted cannot be pre-determined before the closure of IPO issue. File PAS-3 within 30 days of allotment with the following attachments: • Certified true copy of resolution of allotment • List of allottees (as per the format) 8. 2) The Board will allot shares on the credit of allotment money in its bank account. New Shareholders can be introduced to a company in 2 main ways, the allotment of shares and the transfer of shares. Convene board meeting for allotment of shares within 60 days of receipt of money. Regarding time limit to convert such share application money into capital the law is silent. If an applicant has been allotted a smaller number of shares than the number applied for, the secondary has to adjust the excess amount with the amount due on allotment. However as per practice (specifically mention/mandatory requirement in FEMA regarding foreign money) allot share with 6 months of the receipt of application money. File PAS-3 within 30 days of allotment with the following attachments: • Certified true copy of resolution of allotment • List of allottees (as per the format) 8. If an applicant has been allotted a smaller number of shares than the number applied for, the secondary has to … Further, as per Rules 2(c)(vii) of Companies (Acceptance of Deposits) Rules, 2014, any amount has been received for the purpose of subscription of shares and shares is not allotted within 60 days of its receipt then same shall be refunded within 15 days from the expiry of 60 days otherwise same shall be treated as Deposits. If the stock rises above the offering price, the overallotment agreement allows the underwriters to buy back the excess shares at the offering price, so that they don't lose money. Application money received in respect of shares allotted is to be made part of share capital and allotment money in respect of the same shares is to be made due. The Committee is of the view that all this indicates that irrespective of the fact that whether shares are allotted to the company or not, the money given as share application money would not be refundable to the company. Issuance of share certificates to the allottees within 2 months of allotment: 9. Convene board meeting for allotment of shares within 60 days of receipt of money. wud this lead to contravention of section 3(1)(iii) of Companies act, 1956 and what are the implications for issuance of share certificate? The no. When allotment is made, two things are to be done simultaneously. 7. Assuming that equity shares have been allotted, the journal entry will be as follows: (b) When Allotment is Made: The application money is transferred to Share Capital Account. Sec. my querry is whether subscribers to MOA can be allotted shares on 15.04.2012 ie before receiving the share money from them.. is it possible? The refund order is sent along with the letters of regret. The no. 1) You can not allot share before allotment/subscription money received. 10 shares in the above case) is the minimum which can be allotted. 10 shares in the above case) is the minimum which can be allotted. Issuance of share certificates to the … Therefore, New shares can be issued to repay a public company's short- or long-term debt. Allot shares or refund the money at the earliest Any money received as advance in the course of ordinary business shall be treated as deposit if goods or services are not provided within 365 days of receipt. The refunded application money is made to those share holders who could bot be allotted shares. The refund order is sent along with the letters of regret. As per FDI rules read with FEMA, share must be allotted against money received from non-resident within 180 days of its receipt, so allotment of shares made on 64th day is within time limit. Application money received in respect of shares allotted is to be made part of share capital and allotment money in respect of the same shares is to be made due. Section 42(6) mandates allotment of shares within 60 days of receipt of share application money and if it is not allotted, money shall be refunded within 15 days. Minimum 1 lot of shares (i.e. (b) Application Money: Sec. The shares may be allotted for cash, non-cash and may be allotted at a premium. Assuming that equity shares have been allotted, the journal entry will be as follows: of shares which would be allotted cannot be pre-determined before the closure of IPO issue. Entries for the two are similar. Entries for the two are similar. 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