Directors of the Company purchased land in the name of the company.i.e Directors have given loan to company to purchase the land. I want to convert the Loans given by Directors into Share capital.
Query 1. Whether issue of shares against Directors' Loan amount to Issue of Shares for a consideration Other than Cash. 2. If yes, Kindly let me the known the procedures involved while filing Form 5.
Regarding Form 5, there will be no specific requirement, you will have to file it as normal procedure.
and yes, this regards to issue of shares for consideration other than cash.
if its private limited co, then only form 2 is to be filed. in form 2, you will have to select the option of issue other than cash, and fill details as applicable in form 2.
if your company is public limited company, and if you are not issuing the shares to all the existing shareholders, but only to some share holders, then u need to follow the process of ISSUE OF SHARES ON PREFRENCIAL BASIS, u/s 81(1A).
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