Krushna (ACS) (119 Points)
20 January 2011Can anybody help me with the formalities for further issue of Preference Shares by a Private Company,
Correct me if I am wrong
Preferential Issue guidelines and Sec 81 of Companies Act are not applicable to Private Company.
Is thre any limit on the quantum of issue of Preference shares by the company i.e as compared to its Equty Capital base or any other limitation.
Kindly heip,
Krushna
nidhigoel89
(Company Secretary )
(594 Points)
Replied 20 January 2011
Hello!
Plz. dnt confuse the term preferential issue and Preference share.....Preference share is a kind of share and preferential issue means to issue further share to existing shareholder of Co...........
Sec 81 is nt at all applicable to pvt. co.
And i dnt think that there is any limit of quantum to issue preference share as per Co. Act.
Further any learned member pl. advice
Regards
Nidhi
Krushna
(ACS)
(119 Points)
Replied 20 January 2011
Hi Nidhi,
Thanks for your reply.
I know there is a difference between Preferential Issue and Issue of preference shares.
What I wanted to confirm was that preferential issue guidelines are not applicable to Private Companies.
Best Regards
Sudhir Garg
(Service)
(236 Points)
Replied 20 January 2011
Hi
I don't think section 81 applies on further allotment of preference shares.
Regards- Sudhir
nidhigoel89
(Company Secretary )
(594 Points)
Replied 20 January 2011
Hello!
Sry, i misinterpretate the statement
As per my views Sec 81 for further issue of capital and these guidelines are nt at all applicable on Pvt. Co.
Regards
NIdhi
Sudhir Garg
(Service)
(236 Points)
Replied 20 January 2011
Dear Nidhi
Capital means equity as well as preference. Whether section 81 is applicable on further allotment of preference shares??
Regards- Sudhir
nidhigoel89
(Company Secretary )
(594 Points)
Replied 21 January 2011
Hello!
As per my view Sec 81 would be applicable on Equity as well as preference share. Bt nt applicable on Pvt. Co.
Any contrary views are welcomed.......
Regards
Nidhi
Vasant Patel
(Proprietor)
(47 Points)
Replied 11 February 2011
Dear Sir
Can you advise me that whether preference shareholder be counted as member for limit of 50 members in case of Private Limited company ?
cs ashwini kumar
(Company Secretary in Practice)
(173 Points)
Replied 11 February 2011
Dear Mr. Vasant,
Please refer Section 41 of the Companies Act, 1956 with regard to definition of "Member". Accordingly, only equity shareholders can be regarded as member. Further, no company can issued irredeemable preference shares, so the life of the preference shares are limited and also the rights of the preference shareholders are very specific and not general as in the case of equity shareholders.
Best Regards
CS Ashwini Kumar
CAclubindia
