Conversion of Loans into Equity

This query is : Resolved

Mitali Agarwal (Querist)
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11 October 2010 Dear Experts,

I would like to confirm the procedure of conversion of unsecured loan amt. into equity share capital of a public ltd. unlisted co.

The points to be kept in mind are as follows:
A- Provisions of Section 81 and 75 are applicable.

B- AOA is silent but provides that the right to call of shares shall be given with consent of members.

So, the procedure is:
1- Pass Special Resolution in GM and File Form 23 & 2.

Pls confirm me whether the above points are correct?

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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12 October 2010 A special resolution u/s 81 of the Act, be required to be passed in GM.

No need that AOA should have a clause. Compliance of 81 (1A) is sufficient.

While filling form 2 , the allotment be shown as shares allotted in cash