What do you mean by share application?

Why is share Application Account credited?

Share Application or share allotment or Share capital A/c all are personal accounts as they represent money from the shareholders and when money is due, these are to be debited because of the rule “Debit the receiver”.

Can share application money be returned?

Section 42(6) mandates allotment of shares within 60 days of receipt of share application money and if it is not allotted, money shall be refunded within 15 days. If not refunded, the company shall pay interest at the rate of 12% per annum.

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.

Where is share application money on balance sheet?

In cases like this, until the shares are allotted, the amount received is shown under the Share Application Money Pending Allotment. It comes under the head of the Liabilities in the Balance Sheet, in correspondence to the Cash and equivalents on the Assets side.

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Is share application a real account?

Share Application or share allotment or Share capital A/c all are personal accounts as they represent money from the shareholders and when money is due, these are to be debited because of the rule “Debit the receiver”.

What is the use of share?

Shares represent equity ownership in a corporation or financial asset, owned by investors who exchange capital in return for these units. Common shares enable voting rights and possible returns through price appreciation and dividends.

What is the maximum share application money can be?

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

What is 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.

How many days minimum amount must be received?

The time period should be calculated from the date of opening of the issue. Also, the minimum subscription should be collected within thirty days from the date of issue of the prospectus.

What is minimum share capital?

The CAMA 1990 set the minimum authorized share capital for private and public companies at N10,000 (Ten Thousand Naira) and N500,000 (Five Hundred Thousand Naira) respectively[2] and allowed companies to issue at least 25% of their share capital while reserving the remainder for future allotment.

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What is minimum paid capital?

With the Companies Amendment Act 2015, there is no minimum requirement of paid-up capital of the Company. That means now Company can be formed with even Rs. 1,000 as paid-up capital.

Can share application money be used before allotment?

Shares can be issued for Cash or for a Consideration other than Cash. Fund can’t be utilise until basis of allotment is finalised.