Resolution
This query is : Resolved
nyamath.g.naina
(Querist)
04 July 2015
can i have a format of resolution for conversion of unsecured loan to equity shares. its urgent.
CA Neelam Maheshwari
(Expert)
04 July 2015
https://www.caclubindia.com/forum/conversion-of-unsecured-loan-into-equity-share-capital-191242.asp
nyamath.g.naina
(Querist)
04 July 2015
thank you neelam mam, requested you to guide me the full procedure for converting the unsecured loan into equity shares. resolutions need to be passed, forms need to filed as per the companies act, 2013
21 July 2025
Sure! Here’s a sample Board Resolution format for conversion of unsecured loan into equity shares along with a brief on the procedure under the Companies Act, 2013:
Sample Board Resolution for Conversion of Unsecured Loan into Equity Shares
BOARD RESOLUTION
Date: ___________
Venue: ___________
“RESOLVED THAT pursuant to the provisions of Section 62(3) and other applicable provisions, if any, of the Companies Act, 2013 and the Articles of Association of the company, the consent of the Board of Directors be and is hereby accorded for conversion of unsecured loan amounting to Rs. __________ (Rupees __________ only) into __________ equity shares of Rs. _______ each at par/premium as per agreement with the lender(s).
FURTHER RESOLVED THAT the equity shares so allotted shall rank pari passu with the existing equity shares of the company in all respects.
FURTHER RESOLVED THAT Mr./Ms. [Name], [Designation], be and is hereby authorized to sign, execute and file necessary e-forms with the Registrar of Companies and do all such acts, deeds, and things as may be required in this regard.”
Brief Procedure:
Board Resolution: Pass a Board Resolution approving conversion of unsecured loan into equity shares.
Shareholders’ Approval: If required (e.g., increase in share capital), pass a Special Resolution in a General Meeting.
Valuation: If shares are issued at premium, obtain a valuation report from a registered valuer.
Allotment of Shares: Issue and allot equity shares to the lender(s).
Filing with ROC:
File Form PAS-3 (Return of Allotment) within 30 days of allotment.
File Form SH-7 if share capital is increased.
Update Registers: Update the Register of Members and other statutory registers.
Sample Board Resolution for Conversion of Unsecured Loan into Equity Shares
BOARD RESOLUTION
Date: ___________
Venue: ___________
“RESOLVED THAT pursuant to the provisions of Section 62(3) and other applicable provisions, if any, of the Companies Act, 2013 and the Articles of Association of the company, the consent of the Board of Directors be and is hereby accorded for conversion of unsecured loan amounting to Rs. __________ (Rupees __________ only) into __________ equity shares of Rs. _______ each at par/premium as per agreement with the lender(s).
FURTHER RESOLVED THAT the equity shares so allotted shall rank pari passu with the existing equity shares of the company in all respects.
FURTHER RESOLVED THAT Mr./Ms. [Name], [Designation], be and is hereby authorized to sign, execute and file necessary e-forms with the Registrar of Companies and do all such acts, deeds, and things as may be required in this regard.”
Brief Procedure:
Board Resolution: Pass a Board Resolution approving conversion of unsecured loan into equity shares.
Shareholders’ Approval: If required (e.g., increase in share capital), pass a Special Resolution in a General Meeting.
Valuation: If shares are issued at premium, obtain a valuation report from a registered valuer.
Allotment of Shares: Issue and allot equity shares to the lender(s).
Filing with ROC:
File Form PAS-3 (Return of Allotment) within 30 days of allotment.
File Form SH-7 if share capital is increased.
Update Registers: Update the Register of Members and other statutory registers.
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