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conversion of pre. shares into equity

meenu (cs) (416 Points)

15 September 2009

What is the procedure of converting the cumulative pref. shares into equity?Kindly elaborate the procedure from both end i.e. from the company point of view and from the pref. shareholders point also?

Best Regards

meenu

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(Guest)

Cumulative prefrence shrares can not be converted into equity shares

only Convertible prefrence shares can be converted into Equity shares.

However, If you will tell me the no. of prefrence share holder and type of company, then I have a way to your problem.

If you need further clarification than contact me

Ankur Shah (Practicing Company Secretary)

“Guru Gautam” Bungalow, Inside Parshwa Tower,

Nr. Shyamal Cross Road, 132ft. Ring Road,

Satellite, Ahmedabad – 15

Contact: + 91-9427633901

E-mail: ankurjewel @ gmail.com

Blog: csankur.blogspot.com

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meenu (cs) (416 Points)
Replied 16 September 2009

sir,

Actually the Co. has entered into the Share purchase agreement with ABC pvt. ltd and acquired Optionally convertible cumulative pref shares in 2001.The Co. has not opted for conversion in 2003 to equity.Also the dividend remain unpaid due to non declaration of profits. now the co. just wants to know the rights of pref. shareholders in this case. Articles of ABC also does not contain any rights for pref. shares.

What course of action can the Co. take in this regards?

Kindly comment

Meenu

meenu (cs) (416 Points)
Replied 16 September 2009

If we want to change/ amend the articles then what all points we have to check?

meenu

meenu (cs) (416 Points)
Replied 16 September 2009

By virtue of provisions u/s 87, cumulative Pref. Shareholders are entitled to vote on any resolution placed before the company at any meeting due to unpaid dividend .

Is there any fix percentage of voting right needs to vote for resolution?

meenu