Adding investors after incorporation

I have a question with two parts

1)We are two promoters, promoting a company with a authorized share capital of 20Lacs. The two promoters are also the two directors in the company and each buys share worth 1 lac from the authorized capital. After the company is incorporated, how can we add additional investors and issue the remaining shares. Can anyone tell the procedure for doing that?

2)Suppose a investor could be added and one investor buys share worth 10 lacs  from the authorized share capital and becomes the majority share holder. Will he/she become the director by default or there is some other procedure for the majority share holder to become the director?

Replies (1)

(1) The person can get the additional shares by applying to the company & company will allot shares to the person in the board meeting.

So, person can get additional share by way of board resolution.


(2) In company act or any other act, there is no provision related to by default being director after incorporation.

The person has to be appointed as director in meeting.

Nobody can become director by way of shareholding in the company.


e.g Suppose a person holds the entire share capital, then also it is not necessary/compulsory that, he becomes the director.


If You need further clarification than contact me.


Ankur Shah (Practicing Company Secretary)

"Guru Gautam" Bungalow, Inside Parshwa Tower,

Nr. Shyamal Cross Road, Satellite,

Ahmedabad - 15


Contact:+91-9427633901

Email:ankurjewel @ gmail.com

Blog:csankur.blogspot.com

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