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Kunal Khilnani (Service)     08 December 2010

Shares for cash

Abc Pvt Ltd is incorporated with a paid up share capital of 1 lakh. The promoters do not want to open a bank account for at least 2-3 years (as the company will not undertake full fledged activities).

 

Can the initial capital be bought in cash and shown as cash in hand (in balance sheet) for 2-3 years?



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 2 Replies

SACHIN AGARWAL (ADVOCATE)     09 December 2010

I think it is wrong and a bank account should ne there. If any member purchases the share of more then 20,000/=, he is required to pay by Cheque under I.T. Act.

Rajesh (Service)     14 December 2010

In my opinion shares can be issued against cash received from the promoters and being shown as cash in hand in the books of the company.

 


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