Resolution for alloting shares, when a director is intereste

This query is : Open

Pankaj (Querist)
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19 April 2011 Dear All,

We are a unlisted public limited company. We proposed to allot shares on preferential basis to our directors.

We have taken the approval of members under 81(1A) and complied with the prescribed rules.

Now how the resolution for allotment should be passed in the Board Meeting. As we are allotting shares to 3 Directors out of 4?

As all three directors are interested in the resolution

Please guide us on the same.

Thanking You,

Pankaj

Jayashree S Iyer

Jayashree S Iyer (Expert)
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20 April 2011 Please refer to the priviso to Section 287(2) where it is clarified that where at any time the number of interested directors exceeds or is equal to two-thirds of the total strength, the number of the remaning diectors shall be the quorum during such time. (Subject to Minimum two).

In your case you won't have even that minimum required quorum. Hence I suggest you to allot shares to three directors by way of 3 different resolutions so only one director is interested in a particular resolution.

Pankaj

Pankaj (Querist)
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26 April 2011 Dear Madam,

Thanks a lot for kind guidence on above subject.

Howeveron the Board of the Company 3 Directors are relatives of each other and one is independent Director.

How can we allot the shares to these Direcotrs who are relatives as all three are directly or indirectly interested in the resolution....

Whether compliance with S 81 (1A) is enough or we need to follow any other procedure for the same?

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