preferential allotment by private company

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CA Aditya (Querist)
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01 April 2010 Can a private company go for preferential allotment of its shares, if within limits of its AOA ? If yes, would you please send me the draft offer letter for preferential allotment and a draft share application form for a private company ?
mail : surajvyas@yahoo.com

Ankur Garg

Ankur Garg (Expert)
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01 April 2010 Download share application form from the link mentioned below:

https://www.caclubindia.com/forum/details.asp?mod_id=70021

Ankur Garg

Ankur Garg (Expert)
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01 April 2010 Yes a private company can go for preferential allotment of shares and restrictions u/s 81 are not applicable to a private company.

For allotment simply pass a board resolution for allotment of shares and file form-2 within 30 days of allotment to ROC through uploading on mCA site.

For allotment resolution check the link below and use resolution number 5:

https://www.caclubindia.com/articles/ca-articleship-some-useful-corporate-board-resolutions-i-3911.asp

CA Aditya

CA Aditya (Querist)
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01 April 2010 Sir, kindly advise. Is this resolution required ?

"RESOLVED THAT in accordance with the provisions of Section 81 and applicable provisions if any of the Companies Act, 1956 and in accordance with the provisions of the Articles of Association of the Company and subject to all necessary approvals, permissions, and / or sanctions of appropriate authorities, if any, and subject to such conditions and modifications, as may be prescribed by any of them in granting such approvals, permissions and /or sanctions which the Board of Director of the Company may accept, the Board of Directors of the Company are hereby authorised for issuing on preferential basis to one or more Bank(s)/Financial Institution(s) / Mutual Fund(s) /Body (ies) Corporate or any other person(s), and/or on rights basis and/or to public, as may be decided by the Board of Directors, Equity Shares of the Company aggregating to Rs............................. (Rupees...............................) comprising such number of Equity of such value as may be decided by the Board of Directors and on such terms and conditions including retention of over subscription as may be permissible, as may be mutually agreed upon by the Board of Directors of the Company and such Bank(s)/Financial Institution(s)/Mutual Fund(s), Body (ies) Corporate or other person(s).

FURTHER RESOLVED THAT for the purpose of giving effect to the resolution, the Board of Directors of the Company is be and is hereby authorised to do all such acts deeds, matters and things as it may, in its absolute discretion, deem necessary or desirable and to settle any questions, difficulty or doubt that may arise in regard to the offering, issue allotment and utillisation of the isssue proceeds, as it may, in its absolute discretion, deem fit and proper".

Ankur Garg

Ankur Garg (Expert)
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02 April 2010 This resolution is not an appropriate one.

First there is no need to bind yourself with section 81 as it is not applicable to a private company.

Second disclosure of number of allotted shares in BM resolution is mandatory.

For a simple allotment resolution check the link below and use resolution number 5:

https://www.caclubindia.com/articles/ca-articleship-some-useful-corporate-board-resolutions-i-3911.asp

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