Share capital of pvt. ltd company

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Sheetal (Querist)
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18 September 2013 A pvt Ltd company is formed in november 2012 & till date no share are alloted or share application money received...now share holder wants to introduce computers & other fixed asset instead of cash deposit... my question is whether he can do so? if yes what is the procedure.

what is the procedure to issue physical share certificate? whether stamping is compulsary?

Ajay Mishra

Ajay Mishra (Expert)
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18 September 2013 Yes he can contribute any kind against the subscription of shares.

Even though the signature of a subscriber to memorandum of association of a company is not properly attested, once the memorandum has been registered, such subscriber cannot divest himself of his liability.

A subscriber to memorandum cannot, after issue of certificate of registration, repudiate his subscription on ground that he was induced to sign by misrepresentation of an agent of company. [Metal Constituents Ltd., In re (1902) 1 Ch. 707].

If subscribers to memorandum have any objection to memorandum and articles of association, the time to object is before putting their signatures to it. [East Bengal Sugar Mills Ltd., In re (1941) 11 Comp Cas 169 (Cal)].

In accordance with the provisions of section 36(2) of the Companies Act, 1956, all money payable by any member to the company under the MOA or AOA shall be debt due from him to the company. Further, a subscriber to the memorandum must pay for his shares in cash even if the promoters have promised him the shares for services rendered in connection with the promotion of the company.

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Ajay Mishra

Ajay Mishra (Expert)
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18 September 2013 Yes, You will issue share certificate in first Board meeting or there after with proper stamping.

You will submit following document with application for stamping of share certificates:

1. Share Certificate (Specimen)
2. Memorandum & Article of Association
3. Board Resolution authorizing allotment of Shares
4. Form-2
5. Share Holding Pattern
6. Power of Attorney to present the matter.

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Ajay Mishra

Ajay Mishra (Expert)
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18 September 2013 Procedure for stamping of share certificate:

Stage-1 Application to SDM (Concerned Registered Office of the Company)
Stage-2 Application forwarded by SDM to Finance Secretary
Stage-3 Finance Secretary Send Note to the Governor of the state
Stage-4 After due approval Finance secretary issue an approval to SDM
Stage-5 SDM issue challan on the basis of approval
Stage-6 Amount of stamp duty deposited in bank
Stage-7 A certificate of payment of duty issued by the SDM

Sheetal

Sheetal (Querist)
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18 September 2013 I need to know step by step procedure..
1)Board resolution for issue of shares other than cash
2)format of share certificate etc.
3) how valuation of assets done?

Sheetal

Sheetal (Querist)
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18 September 2013 Thank you Ajay Sir.

Ajay Mishra

Ajay Mishra (Expert)
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18 September 2013 No need to mentioned it that it is for cash or other than cash.

You will only passed the following resolution:

The Chairman informed the Board that the Company has received the subscription amount as stated in the subscription clause of the Memorandum and Article of Association for issuance of 15,000 equity shares of Rs. 10 each for Rs. 1,50,000 only from the subscribers to the Memorandum & Article of the Company. The Board considered and passed the following resolution unanimously.

“RESOLVED THAT the subscribers to the Memorandum of Association be issued 15,000 Equity of Rs. 10 each which they have agreed to take as per details below:-

S. No. Name of the Shareholder Address No of Shares Dist. No. of Shares From- To Folio No. Certificate No. Amount (Rs.)
1. Mr. X address , New Delhi-110003 5000 00001-5000 001 001 50000
2. Mr. B Address: (East) Mumbai-400063 10000 5001-15000 002 002 100000

FURTHER RESOLVED THAT the equity shares certificate of the company in respect of such shares be issued to the aforesaid subscribers under the common seal of the company and the same be signed by any two directors of the Company and one authorized signatory of the Company.

FURTHER RESOLVED THAT the name of the above subscribers be entered into the Register of Members of the Company.”

Ajay Mishra

Ajay Mishra (Expert)
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18 September 2013 My Pleasure...............

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