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.

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.

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”.

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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.

Can application money be deposited in any bank?

Further, in the case of share application money, the companies cannot deal with it in the manner they like. Section 69(4) of the Companies Act, 1956 provides that the application money received is to be deposited and kept deposited in a scheduled bank until the time specified in sub-section (4) of section 69.

Can a company use share application money before allotment?

The Companies Amendment Act 2017 withholds the issuers from utilising money that is raised through private placement until the allotment is made and the return of allotment is filed with ROC.

What is share application money?

Share application money is the amount received by a company from applicants who wish to purchase its shares. It is the money received in respect to an initial public offering of shares. This money can be more or less than the actual amount anticipated in respect to the number of shares floated.

What is maximum share application money?

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 do you mean by application money?

Meaning of application money in English

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money that someone pays when they apply to buy new shares. The amount is usually less than the full value of the shares and they pay the rest when they receive the shares.