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    Issue of share certificates_Subscribers

    Posted By : Damini / Published on : 27-Jul-2020 01:40 PM / View : 420 / Comment : 1

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    Dear Friends

    I have a query, based on following facts:

    A private limited company incorporated on 19.02.2020 with two subscribers and Rs.1 Lakh Paid up Share Capital. It applied for bank account but due to lockdown situation, account was opened only by 11.04.2020. Out of two subscribers, one paid subscription money by cheque dated 02.03.2020 and another by cash.

    Now query is:

    1. Can the company issue share certificates before 31.03.2020 based on receipt of cheque and cash?

    2. If company issues share certificates only after opening of bank account and credit of cheque, what it will show in its paid up share capital as on 31.03.2020.
    Read more on : certificatessubscribers share issue

    • As per Section 56(4) (a) of the Companies Act, 2013 every company is required to deliver share certificate within 2 months from the date of incorporation of the company of all securities allotted to the subscribers.

      Also, Section 10A of the Companies Act, 2013 states that directors of companies which are incorporated after 12th January, 2019 {date of commencement of Companies (Amendment) Ordinance, 2019} shall file a declaration within 180 days of date of incorporation verifying that every subscriber has paid the value of shares agreed to be taken by him.

      Failure to comply with above provisions shall have following consequences:

      • Non-issuance of share certificates within the prescribed time limit: Penalty of Rs. 50,000 on both company and officer in default.
      • Failure to comply with Section 10A: Penalty of Rs. 50,000 on company and penalty of Rs. 1,000 for each day subject to maximum of Rs. 1,00,000 on officer in default.
      30-09-2022 / 08:28:43 AM
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