Is spl. resolution required for esop of pvt. ltd. co.?

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Mitul (Querist)
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16 November 2012 hello,

Since 81(1A) does not apply to private limited company, so is special resolution in a general meeting required for approval of esop plan for a private limited company?

Ajay Mishra

Ajay Mishra (Expert)
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16 November 2012 Hi

Generally the provision of section 81(1A) of the Companies Act is not applicable on pvt ltd. company. But if you are going to further issue of shares under ESOP you will take the provisions of section 81(1A) as applicable and comply the same.

Please also check what your company's articles says on issue of further shares.

Mitul

Mitul (Querist)
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16 November 2012 Dear Sir,

Thanks for your reply..

Sir, can you please elaborate on how would 81(1A)apply to private limited company because of issue of shares under esop

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Ajay Mishra

Ajay Mishra (Expert)
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16 November 2012 Hi

Please check your company's article what it says on further issue of shares.

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Mitul

Mitul (Querist)
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16 November 2012 the clause goes like this:
"The company from time to time in general meeting or by a special resolution increase its share capital by creation of new shares as may be deemed expedient whether all the shares for the time being shall have been shall have been fully issued or not, and whether all the shares for the time being shall have been fully called up or not."

So it will require a special resolution.

Thanks.

Ajay Mishra

Ajay Mishra (Expert)
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16 November 2012 Hi,

Now you are right, your article permit to pass SR so i will suggest you to pass SR under section 81 as a good corporate practice.