Priyanka (Student) (25 Points)
16 March 2010As per section 81 a public company can issue further share capital to the existing share holders within in 2 yrs of incorporation or within one yr of first allotment, which ever is earlier.
This mean that we can issue shares to other before this time period.
my question is for this is any share holder approval is required or not.
If not than if the BoD issues shares to others and the existing shareholders are not happy than is there any remedy available to the existing shareholders.
Ankur Garg
(Company Secretary and Compliance Officer)
(114783 Points)
Replied 16 March 2010
Section 81 is applicable to a public company. Yes restriction of sec. 81 are not applicable to an allotment within the time limit mentioned in section 81(1) and no need to obtain shareholders approval as this is not a preferential allotment.
As far as their objection is concerned section 81 is silent. However if they can pove the activity of company as oppression/mismanagement then section 397 and 398 available to the existing shareholders.
Viws of other members solicited.
CAclubindia
