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board resolution for issue of shares

adithyan (student) (63 Points)

21 February 2009

Can any body give me the format of board resolution when shares are alloted for consideration other than cash.

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11 Replies

CS Arpita Rajpurohit (Company Secretary) (1111 Points)
Replied 23 February 2009

Allotment of Shares Pursuant to a Contract

SPECIMEN 1

"Resolved That 1,25,000 equity shares of Rs. 10 each be allotted as fully paid-up to X Ltd., as consideration towards the purchase price of the undertaking called "Calcutta Sweets" in full and final settlement as per the Agreement dated ..........., between X Ltd. and the company.

"Resolved further That share certificates in respect of the shares allotted as aforesaid be issued to the X Ltd., under the common seal of the company and under the signatures of any two directors of the company and counter signature of the secretary of the company.

Resolved further Thatthe necessary Return of Allotments be filed with the Registrar of Companies."

CS Arpita Rajpurohit (Company Secretary) (1111 Points)
Replied 23 February 2009

A. Conversion of loans into shares

Specimen 1

"Resolved That 1,00,000 equity shares of Rs. 10 each bearing distinctive Nos. 100001 to 200000 (both inclusive) in the company's share capital be and are hereby allotted to X Ltd. at par credited as fully paid-up by conversion of and in full and final settlement of existing unsecured loans taken by the company from X Ltd., to the extent of Rs. 10 lakhs, into equity shares.

Resolved further Thatshare certificates in respect of the shares allotted as aforesaid be issued to the X Ltd., under the common seal of the company and under the signatures of any two directors and counter signature of the secretary of the company.

Resolved further Thatthe necessary Return of Allotments be filed with the Registrar of Companies."

B. Special resolution for issue of equity shares consequent upon conversion of loan into equity

Specimen 2

"RESOLVED THAT:

(a) Pursuant to section 81(1A) and other applicable provisions of the Companies Act, 1956 consent of the Company be and is hereby accorded to the issue and allotment of ..... equity shares of Rs. 10 each to ........, at a premium of Rs..... per share credited as fully paid up, in lieu of and against conversion of part of the rupee loan to the extent of Rs.... lakhs taken by the Company from ......;

(b) The new equity shares to be so allotted shall be subject to the Memorandum and Articles of Association of the Company;

(c) The new equity shares shall rank pari passu in all respects with the existing equity shares of the Company except that, they shall only rank for dividend in the year of allotment pro rata from the date of such allotment upto the end of the Company's financial year next following;

(d) No Letter of Allotment shall be issued to ........, and the share certificates in respect of the new equity shares to be allotted as aforesaid shall be completed and delivered within three months from the date of allotment;

(e) For the purpose of giving effect to this Resolution, the Board of Directors of the Company be and is hereby authorised to do and perform all such acts, deeds, matters and things as they may in their absolute discretion deem necessary, desirable or appropriate to settle any question, difficulty or doubt that may arise in regard to the new equity shares as they may think fit."

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 19 March 2009

Dear Adithyan & Arpita,

You may also write the last para of the above resolution in the following way:

RESOLVED FURTHER THAT any director or Company Secretary of the Company be and is hereby authorized to file the return of allotment pursuant to section 75 of the Companies Act, 1956 with the Registrar of Companies concerned in the prescribed form.

Regards--Ankur Garg

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Pawan Singhal (chartered accountant) (655 Points)
Replied 23 March 2009

can anybody sent me boadrd resolution for issue of shareand alloted first time by pvt. ltd. co.

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 24 March 2009

Dear Pawan,

Generally resolution you are asking not required anywhere except "preperation of board minutes"

Find below the desired one. Regards

Attached File : 4 minutes extracts.doc downloaded: 5726 times

Mitali Agarwal (Company Secretary) (638 Points)
Replied 01 December 2010

Dear Friends,

I would like to know that whether allotment of shares in full and final settlement of unsecured loan from Directors/shareholders is allotment otherwise than for cash?

Then whether Form 2 & 3 are required to be filed?

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 01 December 2010

Originally posted by : Mitali Agarwal
	Dear Friends, I would like to know that whether allotment of shares in full and final settlement of unsecured loan from Directors/shareholders is allotment otherwise than for cash? Then whether Form 2 & 3 are required to be filed?

Hi,

As per my general understanding if the previous years BS is reflecting the same amount as Unsecured Loan, then the same transaction should be considered as allotment otherwise than for cash.

In other case say in case the same amt is presented as share appln money than the same is allotment for cash.

Wait for other opinions.

Rgds

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 01 December 2010

SAMPLE BOARD RESOLUTIONS:

For some more sample board resolutions kindly visit the link below:

1. /forum/download-corporate-law-professional-files-70021.asp

2. /articles/ca-articleship-some-useful-corporate-board-resolutions-ii-5874.asp

3. /articles/ca-articleship-some-useful-corporate-board-resolutions-i-3911.asp

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 02 December 2010

Yes, and return of allotment is also required to be filed.

Gaurav Mishra (Management Trainee) (40 Points)
Replied 13 June 2012

Share Capital

Division of Capital

3. The Authorised Share Capital of the Company shall be as specified in Clause V of the Memorandum of Association of the Company.

3A. The Minimum paid-up capital shall be Rs.5.00 lacs.

Redeemable preference shares

4. Subject to the provisions of Section 80 of the Act and these Articles, the Company shall have power to issue preference shares carrying a right to redemption out of the profits or out of the proceeds of fresh issue of shares made for the purpose of such redemption and liable to be so redeemed at the option of the company.

Shares at discount

5. With the previous authority of the Company in the General Meeting and the sanction of the Company Law Board and upon otherwise complying with Section 79 of the Act, it shall be lawful for the Board of Directors to issue, at discount shares of a class already issued.

Further issue of same class of shares

6. The right conferred upon the holders of the shares of any class with preferred or other rights shall not, unless otherwise expressly provided by the terms issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.

Shares at the disposal of the Directors

7. Subject to the provisions of the Companies Act, 1956 and these articles, the shares shall be under the control of the Directors, who may allot or otherwise dispose of the same on such terms and conditions, and at such times as the Directors think fit. Provided that the option or right to call of shares shall not be given to any person or persons without the sanction of the company in General Meeting and where at any time it is proposed to increase the subscribed capital of the company by issue of new shares then, subject to the provision of Section 81 of the Act, the Board of Directors shall issue such shares in the manner provided therein.

Above is the Capital Clause of my newly incorporated (29.09.2011) Unlisted Public Company.

There are only 7 members.

We want to issue and allot Further Shares (At Premium) to the existing 7 members in the same proportion.

As per my understanding following is the procedure:

1. Convene Board Resolution

a. Approve issue of Shares at Premium

b. Approve Letter of Offer

2. Convene Board Meeting after 15 days

a. consider Application/NOC received from Members

b. Allot the Shares to the Members upto the limit they Applied for.

3. File Form 2 with ROC

Please guide me is it correct procedure?

Now my question is whether it is mandatory to get Approved such Issue of Shares at Premium in EGM ?

Please Guide.

Kind Regards

Gaurav Mishra

Divya Sethi (ca student) (459 Points)
Replied 20 May 2015

What should be date of Board Resolution for purpose of Share Alottment? Is there any provision stating that Share Allotment shall be within 30 days of passing Resolution?

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