satish (student) (29 Points)
14 June 2010Hi,
In case of private company, can the shares be issued to a person other than subscribers to the MOA ? Is it neccessary that, before issuing shares to any other person, consent has to be obtained from the subscriber to MOA?
Yogesh Shah
(Managing Corporate Finance)
(1051 Points)
Replied 15 June 2010
Hi dude,
Definitely shares of private company can be issued to a person other than subscribers to MoA. You have asked that ‘can company issue?’ so I assume that you are talking about right shares or further issue of share capital.
However this situation is possible when some shares held by subscribers are transferred by them to other person and thus that other person is now member of private company. As you may be aware that private company, unlike public company, can put additional restrictions for transfer of shares. This only thing may be a hurdle in aforesaid procedure. If that is passed, then very much shares can be issued to person other than subscriber to MoA.
Views of other reputed members is eagerly awaited.
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