Allotment of Shares to subscribers of MOA

[Achuthan Raghav]

Dear Friends,

 

Pl give your valued opinion...

 

 A Private company has allotted shares to the subscribers of its MoA in the First Board Meeting. But the money was received only after the bank account was opened, which took some six months.

 

Now the Auditors have raised an objection to this stating that shares come into existence only when money is received and are asking to revise the date of allotment.

 

What is the solution/ position?

 

Pl clarify...

 

Thanks and Regards,

Achuthan.R

[esha sharma]

Hey Friend

I dont think there is any need to revise the allotment as subscribers have already make a declaration that they will take up such no of shares at such nominal value

so upto 1 yr of incorporation there is no such problem.

But still contrary view solicited

Thanx & Regards

Esha Sharma

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[Vivek Hegde]

Dear Achu

Note that the Subscribers to MOA are deemed to have agreed to become members of the Company and on its registration shall be entered as members in its Register of Members. It is not necessary that there should be a formal allotment of shares to the subscribers.

So there is no point in insisting for revised date of allotment. Make sure that the resolution passed at the first BM is worded properly to take care of the sequence of events (i mean, opening of Bank Account, depositing share application money etc) 

Vivek

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CS Vivek Hegde,B.com, ACS, CWA
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[Abhishekh Kanoi]

In terms of Section 41 of the Companies Act, 1956, the subscribers to the memorandum are deemed to be members of the Company after incorporation.

 

It is not necessary to pass resolution for the allotment of shares nor it is required to pass seperate resolution after receiving share application money.

 

Only the point to take care of is that the date of issuance of Share Certicate would eb after the receipt of share application money. Here the period of three montsh is not applcable.

 

Members views are solicited!!!!

 

Best Regards, 

 

Abhishekh 

On Thu, Aug 26, 2010 at 4:48 PM, Achuthan Raghav <ach...@gmail.com> wrote:

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[SRINIVASEN TA]

Very Simple.  The Money was already received and kept in hand as cash in hand and thereafter deposited in the Bank when account was opened.  This should be the explanation.

 

Regards

 

TA. Srinivasen

On Thu, Aug 26, 2010 at 4:48 PM, Achuthan Raghav <ach...@gmail.com> wrote:

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[Vivek Aggarwal]

Dear Achuthan

Shares can be alloted only after some money has been received. If at least some money has been received before allotment, tell the auditor that the same is application money & balance was received later on, if not you have to revise the date.

 

Regards

CS Vivek Aggarwal

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From: esha sharma <eshas...@gmail.com>
To: csmy...@googlegroups.com
Sent: Thu, 26 August, 2010 4:56:36 PM
Subject: Re: [CSMysore] Allotment of Shares to subscribers of MOA

[CS A Rengarajan]

First of all subscribers to memorandum no limit is given in the companies act to remit the money to the company.  Normally most companies bring money within 1-3 months including preliminary expenses.

In case they are not able to bring the money within the financial year,  you can show as share capital and  advances/loan to be received from directors.  For subscribers to memorandum no need for allotment.

Contrary view solicited

Best Regards

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csarengarajan
Company Secretary, Chennai
email csaren...@gmail.com
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