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Issue & allotment of shares

Srinivasa Kiran (Company Secretary) (62 Points)

20 December 2014

Hi Friends,

I have a small doubt in respect of Issue & Allotment of equity shares to subscribers...

The Board of a Private Company is empowered to Issue & Allot shares to its subscribers as Private Company, doesn't require approval from Shareholders. Whereas, for an unlisted Public company approval is required from its members., IF SO..is the following permitted ???

The Members of an Unlisted Public Company authorized the Board to Issue & Allot shares to its subscribers (as and when due for allotment) to the extent the Authorized Share Capital available / permits..

A resolution on the above lines is Valid or Invalid ??... If so, please let me know

Regards

Kiran

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2 Replies

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 20 December 2014

If you are talking of further issue of shares by the company, it could be either rights issue u/s 62(1)(a) or private placement/preferential allotment u/s 62(1)(c) read with Sec.42. In either case you have to follow procedure as prescribed in the Act/Rules. In case of private placement the resolution must contain the detailed information as provided in the Rules. Vague & blanket resolution like this has no meaning.