29 June 2010
A pvt ltd. co has total 7400 shares of Rs. 100 each.There are 4 shareholders holding 1850 nos shares i.e. @ 25% each.The board consists of only two share holders. The other two share holders are not in the board. Now, the board is willing to appoint 3 new directors( Who are not the shareholders of the co. ) in the board according to their choice. The Articles provides that a director must hold at least 10 shares as his qualification shares. The board therefore is willing to issue 300 new shares and to allott the same to the new directors as their qualification shares. My question is in case of pvt ltd co. can the newly issued shares can directly be allotted to a non-member without offerring the same to the existing share holders?
Actually the the game plan of the present board is in this way they will make 3 non members the members of the company and then they will tyransfer their shares to these 3 persons. They are doing this because One of the existing sharholder is willing to purchase the shares of the co. but the present directord are not willing to sell him their shares. My second question is how the share holder who is willing to purchase the shares of the co. if any one is willing to sell his stake, can protect his rights and become the major shareholder/ director of the co.?
Yes in case of pvt ltd co. the newly issued shares can directly be allotted to a non-member without offering the same to the existing share holders. Reason being section 81 i.e. right issue is not applicable to a private company.
After allotment of new equity file form 2 within 30 days to ROC.
For transfer of share refer my article at the link below:
02 July 2010
As rightly stated by Ankur, Section 81(1A) is not applicable to private limited company.
However, Allotment can only happen by way of board resolution. The other two shareholders can claim their position in the board and become directors before the allotment takes place. They can also avoid such allotment by rejecting such allotment.
I am not getting the balance part of your query. I can think and provide whatever help is possible.
CAclubindia
