Share money deposits must be converted into the company's capital within six months, said the Financial Reporting Council (FRC).
The accounting super regulator also said in a recent directive that companies must include the share money deposits while calculating earnings per share and dividend as soon as the money is deposited, even before the securitisation.
The circular issued on Tuesday prohibited withdrawal or taking back the share money deposited in the company's dedicated bank account.
This FRC directive comes in the backdrop of increasing allegations of faking the paid-up capital of some companies that deceive investors and lenders.
Any non-compliance with the new FRC directive will be punishable, according to the Financial Reporting Act 2015, under which the FRC is formed as an independent government regulatory body.