Redemmable preference shares by a Public Ltd.Co.
This query is : Open
20 December 2010
Hello,
Can anybody let me know the procedure to issue redemmable preference shares by a Public Ltd. co. in detail.
It will be great help to me.
Can anybody let me know the procedure to issue redemmable preference shares by a Public Ltd. co. in detail.
It will be great help to me.
20 December 2010
You need to pass the Board resolution fixing the terms and conditions and allotment of preference shares. then file form 2 with the ROC.
However AOA should contain authority to Board for issuing different class of shares.
1) As per Sec.80(1) a company limited by shares may if so authorised by its articles, issue preference shares.
2) Sec.291(1) authorises Board, subject to the provisions of the Act, to exercise all such powers as the company is authorised to exercise.
3) The Act does not require that shareholders approval is required for issue of preference shares.
In view of the above, we can say that subject to provisions in the Articles to the contrary, the Board of a private co. is authorised to issue preference shares.
Redemption of preference shares does not amount to reduction of authorised capital as provided in Sec.80(3).
However AOA should contain authority to Board for issuing different class of shares.
1) As per Sec.80(1) a company limited by shares may if so authorised by its articles, issue preference shares.
2) Sec.291(1) authorises Board, subject to the provisions of the Act, to exercise all such powers as the company is authorised to exercise.
3) The Act does not require that shareholders approval is required for issue of preference shares.
In view of the above, we can say that subject to provisions in the Articles to the contrary, the Board of a private co. is authorised to issue preference shares.
Redemption of preference shares does not amount to reduction of authorised capital as provided in Sec.80(3).
20 December 2010
Hello Ayush
Thank u for ur reply.
Can u give me the format of resolution to be passed fixing terms & conditions for issue of redemmable preference shares.
and in case AOA needs to be altered, the clause to be inserted for giving authority to Board of Directors to issue different classes of shares.
Pls. reply urgently
Thank u for ur reply.
Can u give me the format of resolution to be passed fixing terms & conditions for issue of redemmable preference shares.
and in case AOA needs to be altered, the clause to be inserted for giving authority to Board of Directors to issue different classes of shares.
Pls. reply urgently
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