Certificate of Receipt of Subscription Money
As per section 17 (3) of Companies Act, 2017 Certificate of Receipt of Subscription Money should be issued by either a practicing chartered accountant or Cost and Management Accountant who would, after verifying the transfer/deposit of funds/ subscription money.
Companies in Pakistan are legally required, by the virtue of new Companies Act, 2017, to receive share subscription money/ paid up share capital from each director/ shareholder in the ratio of share allotted or subscribed by him/ her as mentioned and stated in memorandum of association of the company incorporated.
The deposit should be made into the bank account of the company within thirty (30) days of registration of the company, required by SECP on deposit of subscription money.
The companies are required to file a return of allotment of shares, confirming the receiving of subscription money, within the prescribed time (30 days).
As per new provisions as stated in Companies Act, 2017 Securities and Exchange Commission of Pakistan (SECP) requires certificate attesting, duly attested by a practicing chartered accountant or cost and management accountant where they verify the receipt of money in the bank account, the deposit of paid up share capital money in company bank account.
Section 17 of Companies Act, 2017
The section 17 of Companies Act, 2017 is reproduced here as under: –
Effect of memorandum and articles.—(1) The memorandum and articles shall, when registered, bind the company and the members thereof to the same extent as if they respectively had been signed by each member and contained a covenant on the part of each member, his heirs and legal representatives, to observe and be bound by all the provisions of the memorandum and of the articles, subject to the provisions of this Act.
(2) All moneys payable by a subscriber in pursuance of his undertaking in the memorandum of association against the shares subscribed shall be a debt due from him and be payable in cash within thirty days from the date of incorporation of the company:
Provided that in case the share money is not deposited within the prescribed time, the shares shall be deemed to be cancelled and the name of that subscriber shall be removed from the register and the registrar shall give such direction to the company in each case as deemed appropriate for compliance with the provisions of the company law.
(3) The receipt of subscription money from the subscribers shall be reported by the company to the registrar on a specified form within forty-five days from the date of incorporation of the company, accompanied by a certificate by a practicing chartered accountant or a cost and management accountant verifying receipt of the money so subscribed.
(4) Any violation of this section shall be an offence liable to a penalty of level 1 on the standard scale.
The certificate of receipt of subscription money must be submitted with the registrar of companies within forty five (45) days of registration of a company.
It is required by SECP to submit shareholder subscription money duly signed by chartered accountant with his or her stamp.
The registration of companies with SECP is rapidly increasing and around one thousand new companies are formed each month.
SECP Form Filing for share capital deposit.
A Penalty of approximately Rs.25,000/- can be imposed if a company fails to deposit certified subscription money and submit the certificate to the concerned registrar.