LATEST DETAILS

Preferential Allotment

Procedure for issue of Shares under Preferential Allotment under section 62(1)(c) of Companies Act, 2013

Issue of Shares under Section 62(1)(c):-

Where at any time, a company having a share capital proposes to increase its subscribed capital by the issue of further shares, such shares may be offered to any persons, if it is authorized by a special resolution, either for cash or for a consideration other than cash, if the price of such shares is determined by the valuation report of a registered valuer subject to such conditions as may be prescribed. These persons may include equity shareholders of the company referred to in clause or employees of the company.

Step No.1:- First off all check whether AOA is authorize to the company to issue shares under this method. If not then amend the AOA accordingly.

Step No.2:- Appoint a person having such qualification and experience and registered as a valuer in such manner, on such terms and conditions as may be prescribed for ascertaining the issue price of shares.

Step No.3:- Notice of Board Meeting as per section 173 of the Companies Act, 2013. Convene a Board meeting and pass the following resolution:

  1. Decide the names of the subscribers to the issue.
  2.  to fix the date, time and venue of General meeting and approve the notice and explanatory statement. because a company can issue its shares under this method only when it is passed by Special Resolution by the members of the company in the general meeting.

Step No.4:- After passing Special Resolution file e-form MGT-14 to ROC within 30 days of passing resolution in General Meeting.

Attachment of e-form MGT-14 for this purpose is:-

  1. Notice of General Meeting with Explanatory Statement.
  2. Certified true copy of the resolution passed at the meeting.
  3. Certified true copy of explanatory statement

Step No. 5:- Receipt of money from specified persons against issue of shares. And Stamp duty on issue of shares prescribed by the government  has to be paid accordingly.

Step No.6:-Hold a Board meeting for allotment of shares to the specified persons. Record all information pertaining to preferential allotment in PAS-5. 

Step No. 7: File the e-form PAS-3 within 30 days of allotment of shares.

Attachment of e-form PAS-3 for this purpose id:

1. Certified true copy of Board Resolution

2. List of Allottees

3. PAS-5

Join Whats App Group
Check Your Tax Knowledge
Product Demo
Tax Lok English Viedo
Tax Lok Hindi Viedo
whatsapp with taxlok SUBSCRIBE OUR MAGAZINE

FOR FREE CONDUCTED TOUR OF OUR ON-LINE LIBRARIES WITH OUR REPRESENTATIVE-- CLICK HERE