Shares issued to director
This query is : Resolved
09 January 2016
Can a pvt ltd company issue share to its director against loan taken ?? if yes, under which section?
09 January 2016
CONVERSION OF LOAN INTO EQUITY
GOYAL DIVESH & ASSOCIATES,
Practicing Company Secretary
QUESTION: CAN A COMPANY CONVERT LOANS INTO SHARE CAPITAL OF COMPANY UNDER COMPANIES ACT 2013 (EXCEPT LOAN TAKEN AND DEBENTURE ISSUED TO GOVERNMENT COMPANY).
Solution: Section 62 sub section 3 of Companies Act, 2013
As per The Section:
I. Provisions of Section- 62 doesn’t required to follow in this situation
II. Special Resolution required filing at the time of issue of Debenture and Loan.
Observation:
I. If a company issue Debenture or take loan with the condition to convert such loan and debenture into Shares in future then company has to pass a Special Resolution at the time of accepting of Loan and issue of Debentures. {Proviso of subsection 3 of Section 62}
II. Required to file form MGT-14 for submission of Special Resolution with ROC.
III. Terms should be attached to the Debenture and Loan for conversion into Capital in future.
IV. No need to follow the process given u/s 62 for issue of shares. (subsection 3 of Section 62) [No need to issue Offer Letter in this situation)
Note:
A. If a Company have raised loan earlier in old Companies Act, 1956 and want to convert such loan into Capital of Company, can he do so?
Solu: Yes, he can do so. Because Special resolution was not required at that time
B. If a Company have raised loan earlier in Companies Act, 2013 and want to convert such loan into Capital of Company, can he do so?
Solu: YES, he can do so. if at the time of raising of money he had passed Special Resolution and if company had passed special resolution at the time of receipt of money then he can convert such loan into capital of company.
Following things are required:
a) Special Resolution at the time of raising of Loan
b) Filed MGT-14 with ROC for Special Resolution.
c) Pass a Board Resolution at the time of conversion of same into Share Capital.
d) File form MGT-14 for issue of shares
e) File form PAS-3 for allotment of shares.
CONVERSION OF LOAN INTO EQUITY
GOYAL DIVESH & ASSOCIATES,
Practicing Company Secretary
QUESTION: CAN A COMPANY CONVERT LOANS INTO SHARE CAPITAL OF COMPANY UNDER COMPANIES ACT 2013 (EXCEPT LOAN TAKEN AND DEBENTURE ISSUED TO GOVERNMENT COMPANY).
Solution: Section 62 sub section 3 of Companies Act, 2013
As per The Section:
I. Provisions of Section- 62 doesn’t required to follow in this situation
II. Special Resolution required filing at the time of issue of Debenture and Loan.
Observation:
I. If a company issue Debenture or take loan with the condition to convert such loan and debenture into Shares in future then company has to pass a Special Resolution at the time of accepting of Loan and issue of Debentures. {Proviso of subsection 3 of Section 62}
II. Required to file form MGT-14 for submission of Special Resolution with ROC.
III. Terms should be attached to the Debenture and Loan for conversion into Capital in future.
IV. No need to follow the process given u/s 62 for issue of shares. (subsection 3 of Section 62) [No need to issue Offer Letter in this situation)
Note:
A. If a Company have raised loan earlier in old Companies Act, 1956 and want to convert such loan into Capital of Company, can he do so?
Solu: Yes, he can do so. Because Special resolution was not required at that time
B. If a Company have raised loan earlier in Companies Act, 2013 and want to convert such loan into Capital of Company, can he do so?
Solu: YES, he can do so. if at the time of raising of money he had passed Special Resolution and if company had passed special resolution at the time of receipt of money then he can convert such loan into capital of company.
Following things are required:
a) Special Resolution at the time of raising of Loan
b) Filed MGT-14 with ROC for Special Resolution.
c) Pass a Board Resolution at the time of conversion of same into Share Capital.
d) File form MGT-14 for issue of shares
e) File form PAS-3 for allotment of shares.
Message likes :
1 times
09 January 2016
is this section 62 (3) applicable on director loan.. can we convert his loan to equity
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
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- TDS U/S. 194NF
- 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
- Applicable TDS rate for sale of property in Nov 2024
- Import license renewal
- GST ON EXPORT COMMISSION
- Inventory of finished goods
- 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
- 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 ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding einvoice taken on nil rated sales
Trending Online Classes
CAclubindia
