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How subscribers/ partners will deposit their agreed share money/ contribution in the Company/ LLP?
While formation of a Company, promoters subscribe to Memorandum of Association & agrees to take up number of equity shares stated therein. Similarly in LLP, promoter/ partners agree to bring in capital contribution. Such commitment is mandatory to fulfil post formation of entity. Upon opening of banking account of the Company, promoters are required to deposit the agreed subscription in it. Timing & mode of such payment is very crucial. Post receipt of subscription money, company has to allot the shares to subscribers. In case of LLP, it has to make allocation of capital by doing necessary accounting entries in the capital accounts of the partners. Company post allotment needs to issue duly stamped share certificates to subscribers within the prescribed time frame. Company is required to make necessary entries in the register of members. Stamping of share certificate is also a critical task.
If the promoter is non-resident or foreign national, then company is required to undertake additional compliances under FEMA by submitting couple of returns to RBI through its bankers. KYC compliance for such non-resident or foreign national is mandatory. This entire process of deposit of subscription money and allotment of shares and issue of certificates is complicated and needs proper professional care. We at Bizfirst guide the company & the LLP to timely & correctly complete the process of issuing shares to subscribers or to allocate capital to partners. To know more details and our service offerings, connect to our Biz Smart Executive