Can share application money be received in cash as per Companies Act 2013?

Sec 42 of the Companies Act, 2013 which is supposed to be made effective on and from 1st April, 2014 aims to prohibit the said acts of the companies. As per the provisions of this section, even private limited companies will not be allowed to receive share application money in cash.

Can shares be issued in cash?

Issue of Shares for Cash. … They fulfill their requirement by issuing shares and debentures to the public. Moreover, after receiving the certificate of incorporation, they can offer shares to the public under different methods.

When company issue share application money must be deposited in a?

4. The amount of share application money must be deposited in a bank. It can be operated by the company only after getting the certificate of commencement.

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Can a private company issue shares in cash?

According to my understanding: Companies Act, 2013 doesn’t restrict to issue shares on cash. No method is provided in Companies Act, 2013 u/s 62 for issue of shares. Like mentioned in Private Placement of Shares Section 42.

In which account share application money received should be transferred?

As per section 39(2), Share Application Money should not be less than 5% of the nominal value of a share or any other amount specified by SEBI. This amount is later transferred to share capital account on the issue of shares or refunded in case the issue fails to take place.

Can share App money be received cash?

As per the provisions of this section, even private limited companies will not be allowed to receive share application money in cash. They will require opening a separate bank account for receiving share application cheques and will not be able to use that money till they allot the shares.

Can a company receive cash?

Section 269SS of Income Tax

Section 269SS prohibits a taxpayer from taking/accepting loans or deposits or a sum of more than Rs. 20,000 in cash. All loans and deposits of more than Rs. 20,000 must always be taken through a banking channel.

What is the maximum share application money?

Provided that the maximum tradeable lot in any case shall not exceed 100 shares. The minimum application moneys to be paid by an applicant along with the application money shall not be less than 25% of the issue price.

Sr. No. Category of Persons
(v) Scheduled Banks
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Is share application money part of equity?

Share application monies are converted to equity capital of an entity after allotment of shares to qualifying applicants. This means that the share application money becomes equity after the completion of the allotment process.

What is the minimum share application money?

The minimum share application money is 5% of the nominal value. The money received by the company when it issues shares to the public is known as application money. Allotment is made to the shareholders once the application money is received.

Can a company issue shares other than cash?

When an asset is acquired by a company, the payment of asset price can be made by the issue of shares or in cash to the vendor. Moreover, when shares are given against the purchase price, it is known as ‘Issue of shares for consideration other than cash’. In this case, shares are not open to the general public.

Which type of shares Cannot be issued as per the Companies Act 2013?

redeemable non-cumulative preference shares.

What is Section 62 of Companies Act 2013?

(1) Where any Government by virtue of provisions of sub-section (4) of section 62, in public interest, converts the debentures or loan or any part thereof into shares in the company on such terms and conditions as appear to the Government to be reasonable in the circumstances of the case even in terms of the issue of …

When share application money is received account credited is?

In allotment of shares, for transfer of application money, A/c is debited and A/c is credited.

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Where will money received by the company as share application money against which shares will not be allotted be shown?

On the contrary, Share Application Money received and against which no allotment will be made (e.g. in case of oversubscription) is shown as Other Current Liability under Current Liabilities as the amount is refundable at some later date.

Can share application money be more than Authorised capital?

Though no restriction is imposed by the Companies Act, 1956 a judgement pronounced has made it clear that, a company cannot have Share Application money more than the Authorized Share Capital.