company law
vivek
(Querist) 03 June 2010
This query is : Resolved
Can any one please let me know the Interest rate which a Company has to pay in case the minimum subscripttion is not received and refubd to subscriber is delayed.
Ruchi Gupta
(Expert) 03 June 2010
it is almost around 18%.
A V Vishal
(Expert) 03 June 2010
As per S.69(5)of the companies act, 1956, If the conditions from S.1 to 4 of the said section have not been complied with on the expiry of one hundred and twenty days after the first issue of the prospectus, all moneys received from applicants for shares shall be forthwith repaid to them without interest; and if any such money is not so repaid within
one hundred and thirty days after the issue of the prospectus, the directors, of the company shall be jointly and severally liable to repay that money with interest at the rate of six per cent per annum from the expiry of the one hundred and thirtieth day :
Provided that a director shall not be so liable if he proves that the default in the repayment of the money was not due to any misconduct or negligence on his part.
