sec.81(1A)

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anant hegde

anant hegde (Querist)
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29 November 2010 can a pvt company issue shares under preferential allotment?

udit sharma

udit sharma (Expert)
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29 November 2010 Yes.. it can

CA.ViVeK M ACA

CA.ViVeK M ACA (Expert)
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29 November 2010 The pvt company can issue shares under the preferentail allottment scheme...

CA Sanat Pyne

CA Sanat Pyne (Expert)
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29 November 2010 Agree with experts.

In the case of a private company and an unlisted public company, the auditor would have to examine whether the price at which the company has made the preferential allotment of shares is prejudicial to the interest of the company. In so far as the price at which preferential allotment is made is concerned, it may be noted that valuation of shares of a company involves use of judgment, knowledge of the business, analysis and interpretation and the use of different methods, which may result in assigning different values based on different methods. There are certain basic factors, which affect the value of a company’s shares for which the price calculated is adjusted. The factors are earnings, dividends declared, asset value and goodwill of the company.

Ankur Garg

Ankur Garg (Expert)
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29 November 2010 Section 81 is not applicable to a private company. So if you go for pref allotment in private company you do not need to follow the provisions of section 81(1A) i.e you don't have to take prior approval of shareholders through special resolution in GM.

You can simply allot share by passing a board resolution and filing of form 2 with ROC within 30 days of allotment in BM.

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