Very Urgent-Query about Issue of Shares in a Pvt. Ltd.

1. minor can hold full paid  up shares; by transfer

2. only par value should be there

   on the share certificate; premium ll nt be stated

3. a resolution is to be passed by board for making allotment

Thank you Hitesh.

"1. minor can hold full paid  up shares; by transfer 

2. only par value should be there

   on the share certificate; premium ll nt be stated 

3. a resolution is to be passed by board for making allotment"

But my question is relating to issuance of further shares to minor by way of allotment?

Again I am asking about the showing of paid up value on face of certificate and not the premium amount.

and Can you give sample resolution for making allotment

Issuance of fullt paid shares to Minor through allotment is not possible. However you may do so by making allotment in the name of gurdian of minor for minor...

Thanx

Thank You Ankur Sir.

Can you clarify in light of the following case

"If the name of the minor continues on the register of members and neither party repudiated the allotment, the minor does not incur any liability on the shares during minority (Fazalbhoy Jaffar v. The Credit Bank of India [1914]."

if shares can be allotted to minor if none of the parties repudiate the allotment?

Please also give replies for other 2 ques.

Regards,

Manisha

The case law mentioned by you is protecting the minor (during minority) in case of any liability like payment of call money etc., which is fine...but you can not invoke this protection in case of his/her guardian. Hence guardian of minor will be liable for payment of call money or to fulfill any other responsibility arising out of allotment.

Plz revert if there is any doubt.

Thank You, I understood the point Ankur sir.

But my question is that whether allotment of shares to minor can be considered a violation of law?

And is there any section which can stand to be interpreted as deriving the said meaning.

I didn't find one. Instead there isn't anything about the matter in Companies Act. The point is actually derived from Contract Act That a minor is not qualified to enter a contract, and hence caanot give in writing for allotment of shares.

Please clarify.

Regards,

Manisha

Originally posted by : Manisha
	But my question is that whether allotment of shares to minor can be considered a violation of law?

Once again you are asking the same thing. As told you earlier allotment to the guardian of minor on behalf of minor is fine and in practice and not a violation of law. In this case in the register of member name would appear in the manner below:

Mr. Aditya Maheshwari (Acting through his guardian Mr. Ramesh Maheshwari)

Regards

Also find attached herewith sample list of allottee for your reference: