Utilization of Share Application Money

[Prabhakar KS]

Dear Professionals

Can a unlisted public co. utilise its share application money to pay advance for some services ?

Companies Act is silent in utilisation of Share Application money other than allotment.

learned members are requested to provide inputs on the above issue.

 

"One person with a belief is equal to ninety-nine who have only interests - John Stuart Mill"

Adiyen Srinivasa Dasan
9740283835
 

[sajjala joshi]

Pls refer below link, no idea whether it will clarify your doubt, however you will get some info on unlisted public co

regards
Sajjala

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[sajjala joshi]

On Fri, Mar 16, 2012 at 2:10 PM, sajjala joshi <sajjal...@gmail.com> wrote:

Pls refer below link, no idea whether it will clarify your doubt, however you will get some info on unlisted public co

 

http://www.caclubindia.com/articles/major-amendment-regarding-share-application-money-12196.asp

[Astarag]

No

that facility is no more there

please refer the up dated Unlisted Public Companies (Preferential Allotment)  Rules, 2003

as per the said rules

Provided that the monies received on such application shall be kept in a separate bank account and shall not be utilised for any purpose other than—

 

(i) for adjustment against allotment of securities; or

 

(ii) for the repayment of monies where the company is unable to allot securities.

 

company can utilise the money after alltment of shares

However rule is silent- if after allotment calls are not made- or  total money received is forefeited due to non payment of calls

On Fri, Mar 16, 2012 at 2:07 PM, Prabhakar KS <prabhak...@gmail.com> wrote:

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With 

Cs. P.A. Patnaik

[ramela rangasamy]

share application money can be used for any purpose by the unlisted public company. There is no restriction and it is not specified anywhere.

R.Ramela

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From: Prabhakar KS <prabhak...@gmail.com>
To: csmysore <csmy...@googlegroups.com>; CSChennai <csch...@googlegroups.com>
Sent: Friday, 16 March 2012 2:07 PM
Subject: [CSMysore] Utilization of Share Application Money

[yoganand l]

ramela,

pls. go through the amendment to the unlisted public companies preferential allotment rules
you cannot use the money until shares are allotted


regards,
yogan.

[Bidu Bhusan Dash]

Dear All

Then what about a private limited company.............. I mean can a
private limited company utilise the application money before the
allotment and how to treat the same in the books of account ?

Please clarify !

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Regards,
Bidu

[yoganand l]

on reciept of share application money :

cash

to share application money

on allotment of shares :

share application money

to share capital

 

on utilisation of share application money :

expenditure

to cash

 

 

 

regards,

yogan