shares at premium

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C.S. CHANDANI SARUPARIA (Querist)
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19 October 2010 What are the provisions in respect of issue of shares at premium by a pvt co which is a subsidiary comapny. waht is the maximum amt of premium of a share of face value of rs 10.
What is the procedure that a company should follow.
Plz fwd a specimen resolution

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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19 October 2010 Procedure for issue of shares at premium
1. Check Authorized capital, if insufficient, increase it.
2. Convene a Board meeting and approve the proposal for issue of share at premium specifying No. & nominal value of shares, Amt of Premium, other terms and conditions and draft Notice of General Meeting to pass special resolution.
3. In case of Listed entity, intimate to stock exchange. about the particulars of issue after board meeting
4. Despatch the notice of general meeting to memebers as well as stock exchange(3 copies)
5. Hold General meeting pass special resolution & forward the proceeding to stock exchange.
6. File form 23 within 30 days.
7. Allot the shares in duly convened board meeting.
8. Note that premium sholud be received alongwith the applications. In case of NRI allottes, obtain RBI approval
9. Intimate to stock exchange about allotment.
10. Transfer premium amount received to "Securities premium account".
11. File form 2 with 30 days of allotment.
12. Issue the shares & make entry in Register of Members
13. Complete other formalities as may be required by stock exchange

The Companies Act does not place any prohibition against charging a premium on shares nor does it lay down any restrictions on the amount of premium. Therefore, a company may issue its shares at any price fixed by the Board of directors of the Company.

RESOLVED THAT ______equity shares of Rs. 10/- each at a price of Rs.
______/- per Share (including a Premium of Rs. _/- per Share) in the share capital of the Company be and are hereby allotted to below-mentioned allotee:

S. No. Name No. of Shares
1. __________________
2. __________________

RESOLVED FURTHER that any director of the Company be and is hereby authorized to file the return of allotment pursuant to section 75 of the Companies Act, 1956 with the Registrar of Companies concerned in the prescribed form.

C.S. CHANDANI SARUPARIA

C.S. CHANDANI SARUPARIA (Querist)
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19 October 2010 whether general meeting is required to issue shares at premium.

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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19 October 2010 YES

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