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Malik (Manager)     16 May 2012

Paid up capital

If in a Private Limited co having 4 full time active directors, the Authorised Capital is 5,00,000 and the Paid Up Capital is Rs 0, then what are the rights of the Directors/Shareholders.

How does a property then get divided amongst the DDirectors/Shareholders

Also, if there is equity to be invested into the co, what is the procedure for the same. 



Learning

 2 Replies

Som Bathla (In-house Legal Counsel)     17 May 2012

the definiation of private company itself states that it must have a paid up capital of Rs. 1 lac (5 lacs for public company), so firstly, the paid up capital to be infused in the company, immediately after incorporation within a reasonable time (i.e. time taken in opening bank account).

the directors are not entitled to any property/dividend in the company, they may be paid sitting fees or remuneration/commision etc.

the shareholders would be entitled to get the dividend based on the paid up share capital held by each of the shareholder.

S Jadhav 98336 98330 (Jadhav & Associates)     17 May 2012

The assets of the company is its paid up capital. If it is zero then what are you going to divide between the shareholders? And this can be divided among the shareholders only when the company is dissolved.

S Jadhav

 


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