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The allotment of shares in preferential basis involves the following:

PROVISIONS

Applicable Sections & Rules

a. Sec.62(1)(c);

b. Section 42;                

c. Rule 14 of Companies (Prospectus & Allotment of Securities) Rules 2014

d. Rule 13 of Companies (Share Capital & Debentures) Rules 2014.   

PROCEDURE

S. NO

Sections/

Rules

Provision

Action to be taken

1

62(1)(c) - Shares issued to the persons other than the existing shareholders

Convening EGM and Passing SR

· Preparation of draft EGM notice for passing special resolution for the issue

· Pass Board resolution for convening EGM and approving draft notice of EGM

· Hold EGM and pass special resolution

· File Form MGT.14 with ROC with copy of special resolution

2

62(1)(c)

Valuation Report required

Certificate for valuation of shares from CA with minimum 10 years experience

3

42(1) - Issue of Preferential allotment offer letter

Convene BM

· Preparation and approval of draft letter of offer in Form PAS-4 and maintain record in Form PAS-5

· Authorisation for opening of separate bank a/c for getting application money

· File PAS-4 with ROC in eform GNL-2 along with Valuation report and Extracts of BM within 30 days of circulation (i.e Date of BM)

· File PAS-5 with ROC in eform GNL-2 along with Valuation report and Extracts of BM within 30 days of circulation (i.e Date of BM)

4

Section 42(6), 42(9) & 179(3)(c) -

Convene BM

·Get share application money in a separate Bank Account 

· Board Resolution for Allotment of shares 

· File PAS-3 with ROC within 30 days of 15-10-14 (i.e date of BM) along with Extracts of BM, Valuation Report, List of Allottees, PAS-4 & PAS-5

· File MGT-14 with ROC within 30 days of 15-10-14 (i.e date of BM) along with Extracts of BM 

For any query contact at ashcompanyca@gmail.com


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Category Corporate Law, Other Articles by - CA.Sangam Aggarwal 



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