I have one assignment if anybody can guide me on that.My query goes like this :-
1. There is one Swamiji and he wants to set up a TV channel for which nearly an amount of 20 Crores will be required .
2. His devotees are willing to contribute the amount . They may contribute ranging from 15000 to 1 lakh .
3. We will be keeping the authorized capital as 20 cr., out of which Swamiji can contribute Rs. 50 Lakh . Now we remaining with 19.5 Crores which we need to allot to his devotees . But in what manner ?
Can we allot all the remaining shares as preferential shares ? Or is there any restriction to it . Our first priority is issuing Equity or preference shares , last comes the Debentures .
The point of discussing all this is that Swamiji wants to have major control over the compant i.e, he wants to have majority of the voting rights . He is afraid of the fact that in the future the minority shareholders should not come together and take advantage of the voting rights .
Now upto what extent can we bring him out of his fear by using Company Law .
I hope i was able to explain the story . Can any body guide me on this ?
The voting power in a company is proportionate to the no of shares one holds. In this case, since your client will be holding only a small portion of the shares, his voting rights will be proportionate and cannot have a commanding stake in the company.
One solution to this problem, which I can suggest, is, form the company with a capital (authorized) of 51,00,000 consisting of 5,10,000 shares. Now, first issue 5,00,000 shares so as to have an issued capital of 50,00,000 (contributed by Swami).
Afterwards, come out with another issue, and let the balance contributors subscribe to the remaining 1,00,000 shares at a premium, which will be equal to 19,50,00,000…i.e. issue each shares at 1950 per share. That ways, the share of that swami will be 98% and will command a majority share
Hope I could explain properly..if you have any doubt, please ask….
29 August 2013
This is what i thought of : Incorporate a private limited Company which will have a limit of 200 members according to the new companies bill with an authorised capital of 20 Crores . Now 50 lahk is alloted to Swamiji .
We are remaining with 19.5 Crore . Out of this some portion can be alloted as equity shares to the devotees (200 members).
As members constitute only the equity shareholders , we can issue the remaining as preference shares .
Preference shareholders dont carry any voting rights . So i think this can be one of the solution.
29 August 2013
But Annie, In a Pvt Ltd. Co is 50 under Co. Act, 1956.
Agreed it has been increased to 200 in the Bill, but that is yet to come into force…
Also, if you issue Pref Shares, you will have to give the fixed rate of dividend incase of profits, which may be a problem….
Also, incase of a widup, the Pref share holders will need to be paid first before Swamy, so, you will have to pay up 19.50 crores before swamy gets anything
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