09 June 2010
a company has negatie net worth , but for complying wth going concern principle company wahts to increase its share capital. company decided to allott shares to its director. what is the procedure for that and what resolutons should passed
09 June 2010
If the Company is a private limited company, then a board resolution would be sufficient. On the basis of the board resolution, collect the money, allot shares, file form 2, issue share certificates.
If the Company is a public limited company, then pass resolution under Section 81(1A), obtain members approval for preferential allotment of shares, File form 23, have a board meeting and comply as stated above.
Return of allotment is required to be submitted u/s 75 by filing form-2 with concerned Registrar of Company.
Procedure
1. First convene board Meeting for allotment of equity shares and pass necessary resolution for allotment. 2. Download form-2 from MCA Site www.mca.gov.in 3. Fill form-2 and attach list of allottee. 4. Get form-2 certified from practicing CS/CA and upload the same on MCA Site.
Find below the sample board resolution:
Allotment of Equity Shares
"RESOLVED THAT 1,00,00,000 equity shares of Rs. 10/- each in the share capital of the Company be and are hereby allotted to below-mentioned allotees in physical form
S. No. Name of Allottee No. of Shares 1 Reliance Foods Limited 1,00,00,000 RESOLVED FURTHER that any director of the Company be and is hereby authorized to file the return of allotment pursuant to section 75 of the Companies Act, 1956 with the Registrar of Companies concerned in the prescribed form.”
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