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A company collected Rs. 50 Lakhs from the public and, before allotting shares, its directors withdrew Rs. 10 Lakhs from the separate scheduled bank account to pay registration and preliminary setup costs. According to the Companies Act 2013, how should this transaction be legally categorized?
The transaction is legal if pre-authorized by any special resolution passed by shareholders
The transaction is illegal as application money can only be used for allotments or refunds
The transaction is legal provided the remaining balance of forty lakhs is left totally unused
The transaction is legal as the preliminary expenses are always needed for company setup
The transaction is illegal as application money can only be used for allotments or refunds
Practice and solve "A company collected Rs. 50 Lakhs from the public and, before allotting shares, its directors withdre..." for Part 5 Domain Knowledge - CIL MT Company Secretary 2026. The correct answer is Option B: The transaction is illegal as application money can only be used for allotments or refunds. Detailed step-by-step solution, conceptual clarity, and formulas on Examoogle.
Practice and solve "A company collected Rs. 50 Lakhs from the public and, before allotting shares, its directors withdre..." for Part 5 Domain Knowledge - CIL MT Company Secretary 2026. The correct answer is Option B: The transaction is illegal as application money can only be used for allotments or refunds. Detailed step-by-step solution, conceptual clarity, and formulas on Examoogle.
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