loan to equity conversion.

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DEVAKI (Querist)
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19 November 2008 if i want to convert director loans in to equity share capital of private limited company, what procedure should be followed ?
applicability of various sections.
please help.
thanking you.

chintan

chintan (Expert)
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17 December 2008 Section 95 of the Companies Act is applicable in this Case. You can convert Directors Loan into Equity share Capital but care should be taken that paid up share capital doesnot exceeds Authorised Share Capital. In Case Paid up Capital share Capital exceeds Authorised Capital, Form 5 is to be filed for increasing authorised share capital. Further Form 2 is to be filed for allotment of Shares within 60 days from the date of allotment.

Guest

Guest (Expert)

23 June 2012
There is no bar for conversion of loan into share capital. You are required to enter into agreement with lender for conversion of loan into capital.

Call a Board meeting and pass a resolution and file Form-2 and form 3 within 30 days.

Regards