Further issue of shares

1294 views 2 replies

sakshi

261 Points Joined January 2010

Dear All

One of the listed Company are our client.

The Company has passed following special resolutions by way of POSTAL BALLOT under the provisions of section 192A of the Companies Act, 1956;

a) Increase of authorised share capital and classification of the increased share capital into equity and preferece share capital.

b) Alteration of MOA & AOA

c) Issue of Preference shares.

As the company has increased the authorised share capital, the resultant is allotment of preference shares and increase of subscribed share capital, so my query is if this falls under section 81(1A) of the Companies Act, 1956. Moreover the company is also not alloting the prefreence shares to already existing shareholders.

Section 81 says further issue of shares, does the word "further issue of shares" also includes preference shares ??

Please provide ur guidance.

Thanks in advance.

Regards

Replies (2)

Charu Srivastava

Company Secretary

4210 Points Joined July 2010

section 81 (1A) of the companies act deals with all issues to capital by listed company whose equity shares are listed on any stock exchange by way of equity shares/FCDs/PCDs or any other instruments on a preferential basis which would be converted into or exchanged with equity share at a later date to any select group of person..

In light of the above statement if convertible preference shares are issued then it will fall in sec 81(1) otherwise not...