Use of Share Application Money

vinay.tmmcs tmmcs

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Jul 6, 2011, 5:55:48 AM7/6/11

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Dear members

An unlisted limited company has accepted share application money from its one its directors in 2006 and has utilized the share application money for business purpose.

Now, the company wants to allot shares to the director from whom share application money was received

Can the company allot the shares?

As I am aware of the share application money should be kept in separate bank account and cannot be utilized for any purpose unless allotment is made.

Kindly enlighten me whether company can allot shares.

Regards

Vinay

kiran np

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Dec 21, 2011, 8:07:14 AM12/21/11

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Kiran

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R V SECKAR

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Dec 21, 2011, 8:10:41 AM12/21/11

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Hello,

There is no bar for alloting shares to the director now.

Nowhere in the Companies Act ,it has been mentioned that the share application money to be kept in a separate bank account like dividend.

Regards

R.V.Seckar

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kameswara Rao Kappagantula

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Dec 21, 2011, 8:14:53 AM12/21/11

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Hi

What is the use of moeny?

we received in the shape of Share Application

till we allot shares the same will stand as Share Application Money...but this does not mean that u cannot use that...

It is upto the BOD to decide when to allot shares....normal rules offer and acceptance applicable here.

U can allot shares no problem

THe act is not speaking about where to place share application money

Kamesh

BINDU MADHAVA

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Dec 21, 2011, 8:51:28 AM12/21/11

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The escrow account provision applicable for the preferential allotment in compliance with pref allotment rules 2011.
You can allot the shares before December 14, 2011 to avoid the consequences

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