Mitali Agarwal (Company Secretary) (638 Points)
23 January 20101-Can a public ltd. unlisted co. receive share application money(without increasing auth. cap.), if its paid up capital is equal to its authorised capital?
Or is it compulsory to first conduct GM for increasing auth. cap. and then receive application money and then issue shares by holding another GM?
2- Am I correct in saying that EGM can be conducted at any place other than registered office and at any time?
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17853 Points)
Replied 23 January 2010
Dear Mitali,
Without increasing Authorised Capital, the Company cannot accept share application money (if the authorised capital and paid up capital is equal).
Secondly, EGM or any AGM shall be called for a time during business hours, on a day that is not a public holiday, and shall be held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situated.
Thus, EGM can be called during business hours at the registered office of the company or at any place within the city, town or village in which the registered office of the company is situated.
CourseCart.in
(Mentor at SHAYVIDZ Academy)
(3756 Points)
Replied 23 January 2010
| Originally posted by : Mitali Agarwal | ||
 |
1-Can a public ltd. unlisted co. receive share application money(without increasing auth. cap.), if its paid up capital is equal to its authorised capital? Or is it compulsory to first conduct GM for increasing auth. cap. and then receive application money and then issue shares by holding another GM? 2- Am I correct in saying that EGM can be conducted at any place other than registered office and at any time? |
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Dear Mitali,
1. Share Application can not be accepted if authorised capital is equal to paid up capial.. coz issued capital cannot be morethan authourised capital..
2. Yes ! EGM can held at nywhr otherthan regd office.. e.g. if regd office is kept locked and so it was not possible for the requisitionists to hold the EGM in the same manner in which GMs are ordinarily held , viz at the regd office of the company..
EGM can be held even on public holiday & even after business hours..
Adarsh
Mitali Agarwal
(Company Secretary)
(638 Points)
Replied 23 January 2010
Dear Members,
I am a little confused by the conflicting replies.
Kindly give any decided case law or any provision in support.
CourseCart.in
(Mentor at SHAYVIDZ Academy)
(3756 Points)
Replied 23 January 2010
Mitali,
Please refer Sec. 186..
CLB is empowered u/s 186 to order a meeting of the company if due to any reason it is IMPRACTICABLE to call any meeting otherthan an AGM..
CLB can order for the same -
1. on its own motion
2. on application of director
3. on application of member having voting right..
So, In normal case the GM shud b held in registered office in business hours.. but if it is IMPRACTICABLE to call GM (otherthan AGM) in registered office or during business hours, then director or member can apply to CLB for the same.
In my opinion, the purpose behind calling EGM may be in case of urgency. So, the power is given to CLB for approving the same.
U can also refer some case laws related to Sec 186..
The example given by me in last reply is from case RATHNAVELUSWAMY Vs MANICKVELU AIR 1951 Mad 542.
Mitali Agarwal
(Company Secretary)
(638 Points)
Replied 25 January 2010
But I think that holding an EGM at a state other than Regd. office will not constitute as a reason for impracticability of GM so long as the shareholders do not raise a voice against it.
May be I am wrong?
CourseCart.in
(Mentor at SHAYVIDZ Academy)
(3756 Points)
Replied 25 January 2010
| Originally posted by : Mitali Agarwal | ||
|
But I think that holding an EGM at a state other than Regd. office will not constitute as a reason for impracticability of GM so long as the shareholders do not raise a voice against it. May be I am wrong? |
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Mitali,
EGM at a State otherthan the state in which regd office of the comapny is situated can have a valid reason for impracticability..
e.g. If Regd office is at AHMEDABAD n if the same city is under pressure of terrorist attack.. n comapny is having its branch at INDORE, n Board of Directors requests to CLB for EGM in Indore, then the EGM can be approved for INDORE too...
Adarsh
Mitali Agarwal
(Company Secretary)
(638 Points)
Replied 27 January 2010
But I have read in Ramaiya that "the ACT does not require that a GM other than AGM must be held at regd. off. or nearby place."
Does that mean that BOD should first take approval of CLB for holding EGM in other State (EGM called by the BOD and not by requisition)?
No shareholder is interested in applying to CLB and are ready to come at other place.
CourseCart.in
(Mentor at SHAYVIDZ Academy)
(3756 Points)
Replied 27 January 2010
| Originally posted by : Mitali Agarwal | ||
|
But I have read in Ramaiya that "the ACT does not require that a GM other than AGM must be held at regd. off. or nearby place." Does that mean that BOD should first take approval of CLB for holding EGM in other State (EGM called by the BOD and not by requisition)? No shareholder is interested in applying to CLB and are ready to come at other place. |
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Mitali,
GMs othethan AGM must in the same manner in which the company's GMs are ordinarily held..viz at the regd office of the company..
If the company (in ur case - BOD ) wants to hold GM at other place then it is not deemed to the same manner / ordinarily held..
So, in my opinion, either CLB approval is required if AOA is silent or make provision in AOA by altering the same..(its just my view)
But also consider other member's view...
Adarsh
Mitali Agarwal
(Company Secretary)
(638 Points)
Replied 29 January 2010
Thanks Adarsh for your reply. But the problem is that we have filed Form 5 & Form 23 with attachment as EGM resolution and the EGM has been shown at the Corporate office and not at Regd. Office (both are in diff. states).
Now, what can be the rectifying step? Can we say that due to clerical mistake, the place of meeting in the attached resolution has been shown at corporate office and we can correct our internal records? (co. is unlisted public Co.)
Mitali Agarwal
(Company Secretary)
(638 Points)
Replied 29 January 2010
CourseCart.in
(Mentor at SHAYVIDZ Academy)
(3756 Points)
Replied 29 January 2010
| Originally posted by : Mitali Agarwal | ||
|
|
Thanks Adarsh for your reply. But the problem is that we have filed Form 5 & Form 23 with attachment as EGM resolution and the EGM has been shown at the Corporate office and not at Regd. Office (both are in diff. states). Now, what can be the rectifying step? Can we say that due to clerical mistake, the place of meeting in the attached resolution has been shown at corporate office and we can correct our internal records? (co. is unlisted public Co.) |
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Mitali...
We have two options in this case..
1. wait for user clarification.. may be, form vll get approved widout need of clarification..if we are asked for user clarification, then we can say it as a clerical mistake as u said..
2. It can be rectified from back door.. if u mostly visit to ROC, then consult wid that officer/employee who handles this matter.. He will definitely help u tby giving resubmission option.. or if u r not regular to ROC then consult wid the CA/CS who regularly visit to ROC.. everything is possible.. don't worry..
Adarsh
Mitali Agarwal
(Company Secretary)
(638 Points)
Replied 29 January 2010
CourseCart.in
(Mentor at SHAYVIDZ Academy)
(3756 Points)
Replied 29 January 2010
Mitali..
If form has been approved, then just dont prepare ur minutes as there were clarical mistake..
coz i think as soon as that form is approved by the officer/employee of ROC, he won't get access again to that form.. however there is no prob in one try through backdoor..
So just update ur company's database n wenever the company receives notice, the answer can be given..
Adarsh
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 29 January 2010
Hi,
Completely disagree with the first 2 replies!!!
As per my opinion receipt of share application money over and above of Authorised capital is not a default at all. Reason being share application money is not in the nature of paid up capital unless and until allotment of share against the share application money.
In other words only after allotment of share you can consider such share application money as paid up share capital. But before passing allotment resolution you have to increase your Authorised capital.
Further restrictions put by section-166(2) regarding AGM are 100% not applicable to an EGM.
Best Regards
CAclubindia
