RITU BAJAJ (COMPANY SECRETARY) (158 Points)
01 April 2010Plz advice me on the procedure for conversion of Redeemable Preference Shares into Equity shares in a Private Limited Company. Its urgent....
shubhra
(Company Secretary)
(64 Points)
Replied 01 April 2010
1. Conduct a board meeting
2. Call Preference shareholders meeting and take their consent in the meeting for the shares to be redeemed (make sure about the dividends being paid if not take their consent in that regard as well).
3. Pay dividend and DD tax.
4. Call EGM, confirm the decision of preference shareholders, take care of the debt equity ratio, increase the authorised capital if needed.
5. Create Capital Redumption reserve.
6. Pay the shareholders and make the relevant entries in the members register.
RITU BAJAJ
(COMPANY SECRETARY)
(158 Points)
Replied 01 April 2010
Thanks Shubhra,
Plz clarify if a company do not want to pay dividend to preference shareholders since its a loss making co. can it do so. I mean waht will be the procedure if a co. is not in a position to pay dividend to redeemable preference shareholders.
shubhra
(Company Secretary)
(64 Points)
Replied 01 April 2010
company is having sufficient profit to pay dividend but mit fall short for creating CRR.
RITU BAJAJ
(COMPANY SECRETARY)
(158 Points)
Replied 01 April 2010
No the Company is neither having profit for distribution of dividend nor for creation of CRR. So what shud be the course of action in that case if the shares are to be converted?
shubhra
(Company Secretary)
(64 Points)
Replied 01 April 2010
take the consent of preference share holders for non payment of dividend and convert them into equity share. issue the equity share for premium.
rather than going for redumption opt for conversion.
Sangeeta
(Company Secretary)
(46 Points)
Replied 21 June 2013
The Authorised Share Capital of a Pvt. Ltd. Company consists of 4000 Equity Shares of Rs.100/- each, 2000 12% Pref. Shares of Rs.100/- each and 4000 11% Non-Cum.Pref. of Rs 100/- each. Now the Company wants to convert the preference shares into Equity shares.What is the procedure of conversion of the same?And what are the Forms to be filed with ROC?
Kindly help.
Regards,
Cs Sangeeta Ghose.
CAclubindia
