CA Inter P2 · Chapter 5 · Question 5 of 10
Share application money received by a company becomes a 'deposit' under the Companies (Acceptance of Deposits) Rules, 2014 if the securities are not allotted within sixty days of receipt and the money is not refunded within:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Fifteen days from the date of completion of the sixty days
Explanation
Under the rules, share application money received for allotment is not a deposit. However, if the securities are not allotted within sixty days of receipt and the money is not refunded within fifteen days after that, the money is treated as a deposit. The approach mirrors section 42(6) on private placement.
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