Please tell me the minimum time in which allotment should be made after receipt of application money, in respect of non preferential issue of shares, in case of unlisted public companies.
Please quote section / Notification etc. reference also.
Read Unlisted Public Companies (Preferential Allotment) Rules, 2003. It will help you.
Rule 8. Invitation and Allotment of Securities:- (1) No fresh offer or invitation shall be made unless the allotment with respect to any offer or invitation made earlier have been completed in terms of sub-section (9) of Section 60B of the Companies Act, 1956. (2) Any offer or invitation not in compliance with sub-section (1A) of Section 81 read with sub-section (3) of section 67 of the said Act, shall be treated as public offer and the provisions of the Securities Contract (Regulation) Act, 1956 (42 of 1992) and the Securities and Exchange Board of India Act, 1992 shall be complied with. (3) All monies payable on subscription of securities shall be paid through cheque or demand draft or other banking channels but not by cash. (4) Any allotment of securities shall be completed within sixty days from the receipt of application money and in case the company is not able to allot the securities within the said period of sixty days, it shall repay the application money within 15 days thereafter, failing which it will be required to be re-paid with interest at the rate of 12% per annum. Provided that the monies received on such application shall be kept in a separate bank account and shall not be utilize for any purpose other than:- (i) for adjusting against allotment of securities; or (ii) for the repayment of monies where the company is unable to allot securities. (5) No company offering securities shall release any public advertisement or utilize any media, marketing or distribution channels or agents to inform the public at large about such an offer. (Inserted by amendments as on 14.12.2011)
16 April 2013
Thanks sir for your valuable reply. But Unlisted Public companies (Preferential Allotment) Rules, 2003 are for Preferential allotment in pursuant of Section 81(1A) and my question is about allotment of shares in respect of further issue u/s 81(1).
Please guide me for issue u/s 81(1) i.e. to existing equity share holders.
18 April 2013
(4) Any allotment of securities shall be completed within sixty days from the receipt of application money and in case the company is not able to allot the securities within the said period of sixty days, it shall repay the application money within fifteen days thereafter, failing which it will be required to be re-paid with interest at the rate of twelve percent per annum:
18 April 2013
Sir, but these rules are applicable for preferential allotments by companies. Whether these are applicable for other than preferential allotment??
24 April 2013
In that case the provisions of Rights Issue would be applicable because the shares re to be offered to the existing shareholders in the proportion of their shareholding otherwise the issue would be preferential.
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