Transfer of shares by a Company to its creditor

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Shyamapada Chakrabarty

1 Points Joined June 2017

An Existing Company is transferring its shares to a Body Corporate towards repayment of a loan taken from that Body Corporate. The question arises whether it is a case of allotment or transfer of shares (with proper transfer deed)? Thank You..

Replies (1)

Vatsla Alagh

1545 Points Joined July 2017

If shares (which are to be transferred) are already allotted to some member of company, then this is the clear case of transfer between them. If company is giving fresh shares to such Body corp then this is the case of conversion of loan into equity