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Share allotment

Juhi Pant (Company Secretary) (132 Points)

07 July 2014

Under Companies Act, 1956 Company can start its business after taking Certificate of Incorporation, but now under new Companies Act, 2013 a Company can start its business only after taking Certificate of Commencement.

so, can a Company can allot share shares to new shareholder after company is incorporated or new shares can be alloted after taking Certficate of Commencement.

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3 Replies

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 07 July 2014

Allotment of shares is not considered as commencement of business. Hence we can allot shares even before getting certificate of commencement of business.

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Juhi Pant (Company Secretary) (132 Points)
Replied 07 July 2014

Thanks for the reply. Our Company has already two shareholders at the time of incorporation, now it wants to have one more shareholder. so, can it allot shares to new shareholder before taking certificate of commencement.