Applicable Provisions:

Section 46 (issue of share certificates) and sub-section (4) of section 56 (relating transfer and transmission of securities) read with Rule 5 of Companies (Share capital and debentures) Rules, 2014. Time period of issue a share certificate (Section 56 (2))

• Subscriber to the memorandum :- 2 months from the date of incorporation
• Allotment of any of its share:- 2 months from the date of allotment
• Transfer or Transmission of share:- 1 month from the date of receipt of the instrument
• Allotment of debenture :- 6 months from the date of allotment

Penalty:

• Company: – 25,000 Rs but which may extend to 5,00,000 Rs
• Officer :- 10,000 Rs but which may extend to 1,00,000 Rs

TIME LIMIT FOR SHARE ALLOTMENT -FEMA & COMPANIES ACT, 2013

• As per FDI Regulations read with FEMA, share must be allotted against share application money received from non-resident within 180 days of its receipt.
• Whereas, as per section 42(6) of Companies Act, 2013, if Company has received any amount received for the purpose of allotment of shares on Private placement basis then shares must be allotted within 60 days of receiving share application money for the same otherwise Company shall refund the whole money within 15 days.
• Further, as per Rules 2(c)(vii) of Companies (Acceptance of Deposits) Rules, 2014, any amount has been received for the purpose of subscription of shares and shares is not allotted within 60 days of its receipt then same shall be refunded within 15 days from the expiry of 60 days otherwise same shall be treated as Deposits. In contrary, sub clause (ii) of same Rules 2(c) of Companies (Acceptance of Deposits) Rules, 2014, states that amount received from foreign Body Corporate or citizens in compliance of FEMA, shall not be treated as Deposits.
  So, in the absence of any overriding provisions between Companies Act, 2013 and FEMA, the stricter provisions of Companies shall prevail and consequently, amount received from non-resident as share application money must be allotted within 60 days.

- M.Com., A.C.M.A., F.C.S, LLB Vidya Joglekar