First Board Meeting of a Private Limited Company

Hi Gautam,

Please find enclosed herewith Sample First Board Meeting Minutes containing all the necessary resolutions. Hope it'll help you.

Best Regards

Ankur Garg

Good job Ankur

Hi Ankur

Thanks a lot for your help. I had a couple of further questions -
1. Isn't a resolution required for issue of shares to the MoA subscribers?
2. Can the board appoint statutory auditors at a later date (in a subsequent meeting of the board)?

Regards
Gautam

ANSWER TO YOUR QUESTION NO. 1

Observe carefully,

Subscribers of MOA are deemed shareholders of the company. They don't need to take shares. As soon as they subscribe the MOA & file it with ROC along with other incorporation documents they become the members as well as shareholders of the company.  Appreciate further have you ever filed form-2 for the subscribers? The answer would be No. That itself is a kind of proof that no allotment is required to be made to the subscribers. 

Form-2 is not required to be filed for subscribers hence no formal allotment is required in case of subscribers. They are deemed members and shareholders of the Company.

Record the same in the first BM Minutes.

ANSWER TO YOUR QUESTION NO. 2

As per section 224(5) first auditor shall be appointed by the Board with in 1 month of registration of the company.

Hence, you have to convene a board meeting with in 1 month and appoint first auditor.

You can appoint him in a subsequent board meeting but such subsequent board meeting is also required to be held with in 1 month of registration of the company.

Hope this answer would be off some help to you.

Best Regards

Dear Ankur,

I appreciate your efforts replying querry in such a detail.

Still I have one question: Please elaborate this further

Subscribers of MOA are deemed shareholders of the company. They don't need to take shares.

Are we not supposed to issue share certificate to them?

If share certifcates to be issued , How and in what manner are they supposed to bring Share Capital?

Is it possible to issue shares to subscribers for a consideration other than cash?

Dear Kamal,

Kindly appreciate the discussion below:

ANSWER-1

Share Certificate to Subscribers

Yes, share certificate is very much required to be issued to the subscribers of MOA.

Bringing of Share Capital

There is no specific provision in the Co. act for the same.

OPTION-I

Ideally such amount should be deposited by the subscribers after incorporation of the co. in the newly opened bank a/c of the company and record the same in the first BM Minutes.

OPTION-II

Alternatively, as there is no tracing of such amount, it may be deposited by them later.

As a CS i would suggested you should opt I option to avoid any kind of future problem.

Even if you receive the amount from subscribers after 6 months the date of deemed Allotment and date on share certificate would remain the same i.e. date of incorporation of the company.

ANSWER-2

Issue of shares to subscribers other then cash

The position regarding the above query is yet to be tested in law. As per my knowledge there is no provision in law which prohibit issue of shares to subscribers for consideration other then cash and also there is no case law which prohibit the same.

So since there is no restriction in law--issue of shares to subscribers other then cash is very much possible.

Kindly share your views regarding question-2.

Hope I am able to bring some clarity. In case of any doubt please post it. I’ll definitely try my best to solve it.

Best Regards

Ankur Garg

For more clarity of concept and discussion on date of allotment to subscribers and date to be mentioned on share certificate you may check the following bookmark at my profile:

Allotment to Subscribers Vs Deemed membership

Alternatively click the link below:

/forum/messages/2009/3/28744_paidup_capital_vs_subscribed_capital.asp?     

Regards

Dear Ankur,

Thanks a lot for such an enlarged reply.I am in absolute agreement with you on Question No 2.

Could you please let me have the draft of BM highlighting the fact of issuance of shares for consideration other than cash?

Dear Kamal,

Kindly accept my thanks for your kind words.

Now tell me are you looking for a board meeting resolution for allotment of shares other then cash? Explain your need.

Regards 

Yes please.I need draft board meeting resolution for allotment of shares other then cash.Thanks in advance.

Dear Kamal,

Please find attached herewith the desired resolution. Please work it out as per your requirement.

Regards

Can the auditor not be appointed by resolution by circulation? If yes, then whether holding of Board meeting within one month is must?
 

Hi everyone,

I am incorporating a subsidiary of foreign company in India. I want to know whether the first board meeting which is to be held within 30 days of incorporation can be held outside India as the directors / promoters are outside India.

Ajay Kumar