Issue of share capital
This query is : Resolved
22 May 2014
A Private company wants to issue its 60000 Equity Shares. Plesae suggest us complete procedure of share allotment under the Companies Act 2013.
22 May 2014
For Allotment of shares, following procedure will be followed:
1. Check share application and allotment money received from proposed allottee.
2. Call a Board Meeting for allotment of shares.
3. After Allotment of shares, file Form-2 with ROC with in 30 days from the date
of allotment.
4. Make application for payment of stamp duty to your concern SDM (Revenue
Deptt).
5. Issue of share Certificate within 3 months from the date of allotment as per
section 113 of Companies Act, 1956.
6. Make entry in the Register of members of the company.
7. Make Entry in Board Minutes.
1. Check share application and allotment money received from proposed allottee.
2. Call a Board Meeting for allotment of shares.
3. After Allotment of shares, file Form-2 with ROC with in 30 days from the date
of allotment.
4. Make application for payment of stamp duty to your concern SDM (Revenue
Deptt).
5. Issue of share Certificate within 3 months from the date of allotment as per
section 113 of Companies Act, 1956.
6. Make entry in the Register of members of the company.
7. Make Entry in Board Minutes.
22 May 2014
Thanks but I want procedure under the Companies Act 2013
02 August 2024
Issuing shares in a private company under the Companies Act, 2013 involves several key steps. Here’s a comprehensive guide to the procedure for issuing 60,000 equity shares:
### Procedure for Issuing Equity Shares Under the Companies Act, 2013
1. **Board Approval:**
- **Pass a Board Resolution:** The board of directors must pass a resolution to approve the issuance of shares. This resolution should specify the number of shares to be issued, the price, and the terms of issuance.
2. **Determine the Pricing and Terms:**
- **Share Pricing:** Decide whether the shares will be issued at par value, at a premium, or at a discount (if permissible).
- **Terms of Issuance:** Define the terms, such as the mode of payment, rights attached to the shares, and any preferential terms.
3. **Prepare and File a Prospectus (if applicable):**
- **Private Placement:** If the shares are being issued through private placement, a private placement offer letter (also known as the offer letter or application form) must be issued to selected individuals or entities.
- **Prospectus:** Not required for private companies but essential for public companies or in the case of an initial public offering (IPO).
4. **Issue Share Application Form:**
- Distribute the share application forms to prospective investors (existing shareholders or new investors) and collect their applications.
5. **Allotment of Shares:**
- **Pass Allotment Resolution:** After receiving the applications, the board must pass a resolution to allot shares to the applicants. The resolution should include the details of the applicants and the number of shares allotted to each.
- **File Form PAS-3:** Within 30 days of the allotment, the company must file Form PAS-3 with the Registrar of Companies (ROC). This form includes details of the allotment and the names of the allottees.
6. **Update Share Register:**
- **Register of Members:** Update the company's register of members to reflect the new share allotments. The register should include details such as the names, addresses, and number of shares allotted to each shareholder.
7. **Issue Share Certificates:**
- **Prepare Share Certificates:** Issue share certificates to the allottees as evidence of their shareholding. Ensure that the certificates are signed by authorized signatories and include the share numbers and details.
8. **Maintain Records:**
- **Minutes of Meetings:** Maintain the minutes of the board meeting where the allotment resolution was passed and any general meetings if applicable.
- **Other Records:** Keep records of the share applications, allotment letters, and other related documents.
9. **File Annual Return:**
- **Form MGT-7:** Ensure that the updated shareholding pattern is reflected in the annual return filed with the ROC. This form should be filed within 60 days from the date of the annual general meeting (AGM).
### Additional Considerations
- **Compliance with Sections:** Ensure compliance with relevant sections of the Companies Act, 2013, including:
- **Section 42:** Governs private placement of shares.
- **Section 62:** Governs further issue of shares and rights issue.
- **Section 63:** Deals with the issue of shares at a discount.
- **Section 73-76:** Relates to the acceptance of deposits from shareholders, which might be relevant if the shares are issued in exchange for deposits.
- **Legal and Regulatory Compliance:** Ensure that all regulatory requirements are met, including compliance with the SEBI guidelines (if applicable), especially if the company is listed or plans to be listed.
By following these steps, a private company can effectively issue its equity shares in compliance with the Companies Act, 2013.
### Procedure for Issuing Equity Shares Under the Companies Act, 2013
1. **Board Approval:**
- **Pass a Board Resolution:** The board of directors must pass a resolution to approve the issuance of shares. This resolution should specify the number of shares to be issued, the price, and the terms of issuance.
2. **Determine the Pricing and Terms:**
- **Share Pricing:** Decide whether the shares will be issued at par value, at a premium, or at a discount (if permissible).
- **Terms of Issuance:** Define the terms, such as the mode of payment, rights attached to the shares, and any preferential terms.
3. **Prepare and File a Prospectus (if applicable):**
- **Private Placement:** If the shares are being issued through private placement, a private placement offer letter (also known as the offer letter or application form) must be issued to selected individuals or entities.
- **Prospectus:** Not required for private companies but essential for public companies or in the case of an initial public offering (IPO).
4. **Issue Share Application Form:**
- Distribute the share application forms to prospective investors (existing shareholders or new investors) and collect their applications.
5. **Allotment of Shares:**
- **Pass Allotment Resolution:** After receiving the applications, the board must pass a resolution to allot shares to the applicants. The resolution should include the details of the applicants and the number of shares allotted to each.
- **File Form PAS-3:** Within 30 days of the allotment, the company must file Form PAS-3 with the Registrar of Companies (ROC). This form includes details of the allotment and the names of the allottees.
6. **Update Share Register:**
- **Register of Members:** Update the company's register of members to reflect the new share allotments. The register should include details such as the names, addresses, and number of shares allotted to each shareholder.
7. **Issue Share Certificates:**
- **Prepare Share Certificates:** Issue share certificates to the allottees as evidence of their shareholding. Ensure that the certificates are signed by authorized signatories and include the share numbers and details.
8. **Maintain Records:**
- **Minutes of Meetings:** Maintain the minutes of the board meeting where the allotment resolution was passed and any general meetings if applicable.
- **Other Records:** Keep records of the share applications, allotment letters, and other related documents.
9. **File Annual Return:**
- **Form MGT-7:** Ensure that the updated shareholding pattern is reflected in the annual return filed with the ROC. This form should be filed within 60 days from the date of the annual general meeting (AGM).
### Additional Considerations
- **Compliance with Sections:** Ensure compliance with relevant sections of the Companies Act, 2013, including:
- **Section 42:** Governs private placement of shares.
- **Section 62:** Governs further issue of shares and rights issue.
- **Section 63:** Deals with the issue of shares at a discount.
- **Section 73-76:** Relates to the acceptance of deposits from shareholders, which might be relevant if the shares are issued in exchange for deposits.
- **Legal and Regulatory Compliance:** Ensure that all regulatory requirements are met, including compliance with the SEBI guidelines (if applicable), especially if the company is listed or plans to be listed.
By following these steps, a private company can effectively issue its equity shares in compliance with the Companies Act, 2013.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- REGARDING GST ON COMMERICIAL PROPERTY
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- GST on export of services and Input Credit
- ITC temporary reversal and reclaim
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- TDS U/S. 194NF
- Applicable TDS rate for sale of property in Nov 2024
- Capital gain consideration
- TDS deduction (debit notes)
- Can a partnership firm become partner in a LLP ?
- Quiery in relation to GST liability in case of an advocate who has obtained GST registration.
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- TDS on purchase of value vouchers for employees ?
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
Trending Online Classes
CAclubindia
