Share issue query

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 December 2011 Weather a private limited company can issue shares at premium and what is the procedure to do so.

Case: Company had 50000 authorised share out of which 10000 issued @10 now the company want to issue remaining 40000 share at10 share price &90 as premium.

Jiten Gupta

Jiten Gupta (Expert)
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30 December 2011 Yes. Private Company can issue shares at a premium. It is a simple process. Just File form 2 and mention there the required info, as related to nominal amount and premium. But make sure security premium amount can be used for the purposes specified u/s 78 (2).

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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30 December 2011 Yes

Procedure for issue of securities at a premium.

1. Check whether authorized share capital is sufficient to permit the issue of shares at premium. If not, increase the authorized share capital.

2. Convene a Board meeting to approve the proposal for issue of securities at premium specifying the No. 7 nominal value of shares, amount of premium, terms & conditions for issue and approve draft notice of general meeting to pass the special resolution.

3. Dispatch the notice of General meeting to members & auditors.

4. Hold general meeting and pass special resolution.

5. File e-Form 23 within 30 days fro m the date of general meeting.

6. After filing e-Form 23, convene board meeting to allot the shares at premium. The premium should be received alongwith the application. In case allotment to Non resident, take RBI prior Approval.

7. Transfer premium so received to "Securities Premium Account"

8. File e-Form 2 within 30 days of allotment.

9. Issue share certificates & enter the relevant particulars in Register of members.

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