In real estate business a firm with paid up capital of Rs. 1,00,000/- only is launching projects worth multi-crores. How is it possible. Real Estate developers register a pvt. ltd. firm with 1 lakh capital for a new project that they want to launch and do all business related to that project through this registered company. How can they buy land worth Rs. 1 crore for the project and manage it with a firm with only 1 lakh in capital. Is this legal? Is there any legal loop hole which they are using for benefit?
I will be thankful if experts could help me in understanding this.
