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Cancellation of Allotment of Shares

Raj Jha (Company Secretary) (33 Points)

31 January 2011

Hi,

A Co. XYZ Ltd allotted shares to some shareholder and F-2 filed with ROC. Later on it was discovered that such allotment was wrongly made. Can it cancel the allotment of shares?

Regards,

Raj

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7 Replies

Jaideep (Service) (1368 Points)
Replied 31 January 2011

If the allotment is irregular or not valid..... then allotment will be voidable at the option of shareholder. Plz refer provision for Effect of Irregular Allotment in Companies Act.

Regards

Jayashree S Iyer (Company Secretary) (3224 Points)
Replied 04 February 2011

Irregular allotment applies where allotment is made in contravention of the provisions of Section 69 or 70 of the Companies Act, 1956.

Share allotments are made after the same is approved in the Board Meeting. Then how come it went wrong? Probably you may want to change or revise it.

You may carry out the changes by -

1) holding a Board Meeting and getting the previous allotment cancelled in that Meeting.

2) In the same Board Meeting, decide about fresh allotment of cancelled shares

3) Therafter file Form 2.

Whether share certificates in pursuance of previous allotment are issued? If so, you have to get the SCs back, cancel them and issue fresh SCs.

Make necessary corrections in the Register of Members as well.

Sudhir Garg (Service) (236 Points)
Replied 04 February 2011

Dear Jayashree

I agree with you. But there may be practical problem while filing Form 2 again.

a) I am supposing the instance where at first allotment, paid up capital equals to its authorised capital. Then filing Form 2 again (revised one) may ask for increase of authorised capital first.

b) further, what documents company is required to be filed with ROC w.r.t decision taken by board for cancellation of first allotment and ROC records may continue to show first allotment as valid

c) whether Form 2 has any column which needs to be filled up in case of revision of allotment.

Views are solicited.

Regards- Sudhir

Neha Ganatra (article) (42 Points)
Replied 11 February 2011

i have a query on the similar topic, but in my case the filing of form is not been done correctly. there was a share premium which due to manual error has been ommitted. The form has already been approved by the ROC. can u suggest me a remedy. how can i re submit the form?

Shweta (Assistant Company Secretary) (22 Points)
Replied 12 October 2012

Sir/Madam, a Form 2 in the name of our co. is mistakenly uploaded and we did not wanted to increase our paid-up capital, we did not made any allotment of shares to anyone nor we prepared any share certificates to the effect. As a private Company we do not think it will be a problem to give the reverse effect of such allotment, we can produce the Signed resolution of all the Directors to give reverse this allotment. please advise the procedure for the reverse of this allotment and oblige

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 14 October 2012

In MCA-21 system there is no provision for cancellation of Form 2 which has been filed and approved by ROC,

Jatin Gupta (2 Points)
Replied 17 April 2018

hello seniors, i have a query for share in private co. my company has appointed a new director and dis-engagement of other, we want to cancell the old director share and allot the same to new director,kindly tell me the procedure..thanks in advance