Allotment of shares

This query is : Resolved

CA manish mahajan (Querist)
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25 April 2011 Hi,

What is the procedure for allotting shares from one director to a newly appointed director?

situation-
ABC pvt. ltd has authorised and paid up capital of Rs 100000(10000 shares of rs. 10 each) issued as 5000 shares to each of the promoter directors.

Now a new director is to be added in the company and he is to be allotted 2000 shares from one of the existing director.

query-
1. what forms are required for this process?
2. how is the new director appointed?
3. how will be the shares transferred to him from existing director?

Please respond.

CA Sumat Singhal

CA Sumat Singhal (Expert)
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12 July 2011 You can directly appoint that person as WTD.No need for the first appointment as additional Director and then WTD.
If u see the Form 32, it will ask for the No. of directors for the form is being filled
So, Make the aperson WTD directly.
Procedure for transfer of shares of private company
Transfer of shares in a private company is governed by AOA. Some steps followed by a private company to give effect to the transfer of shares are as follows:—

(i) Transferor should give a notice in writing to the company for his intention to transfer his share.
(ii) The company in turn notify to other members as regards the availability of shares and the price at which such share would be available to them along with the time limit within which they should communicate their option to purchase shares on transfer.
(iii) Such price is generally determined by the directors or the auditors of the company.
If none of the members comes forward to purchase shares then the shares can be transferred to an outsider and the company will have no option, other than to accept the transfer.
Valuation of share for the purpose of transfer of shares of a private company
Normally Articles of a private company contain provisions in this regard and provides that the shares are to be sold at a fair price determined by directors or the company's auditors.