Is it necessary to hold an EGM to allot equity shares ?

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Saurabh Jindal (Querist)
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04 July 2009 Hi Experts!
Plz tell me is it necessary to hold an EGM to allot equity shares if we have sufficient Authorised Capital & Unissued Capital

Ankur Garg

Ankur Garg (Expert)
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04 July 2009 Hi Saurabh,

If you are allotting equity shares to the existing shareholders then in that case there is no need to take shareholders' approval in EGM.

In that case procedure of allotment would be as follows:

1. First convene Board Meeting for allotment of equity shares and pass necessary board resolution for allotment.
2. Download form-2 from MCA Site www.mca.gov.in
3. Fill form-2 and attach list of allottee.
4. Get form-2 certified from practicing CS/CA and upload the same on MCA Site.

On the other hand if you are not allotting equity shares to the existing shareholders then in that case you have to take approval of shareholders in EGM by passing special resolution u/s 81(1A)

After taking approval of shareholders in EGM by passing special resolution u/s 81(1A) you have to follow the same procedure as mentioned above i.e. filing form-2.

Also remember section 81 is applicable only on public company.

Regards

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