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Issue of Shares from Authorized Capital

Hari Nair (CA Business) (164 Points)

15 September 2021

Aprivate company Autjorized Capital is 10 Lakhs and issued capital is 1 Lakh.

There is only two shareholders of the Company and they wish to add new shareholders to company.

Whether Company can add new shareholders without transferring the shares of existing share holders and what's the procedure ?

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4 Replies

Kala Purva (63 Points)
Replied 16 September 2021

Yes...

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 16 September 2021

No need to worry about transferring of shares. That issued capital is raised capital. Dividends are paid to equity holders from retained earnings. So, you can add

Bank a/c

To New Partners capital a/c

Chirag (Professional) (1979 Points)
Replied 27 September 2021

You have to go with Section 42 Of companies act, 2013 that is issue of shares on private placement..subject to total additional capital raised is within the limit of 10 Lacs, else you have to first alter capital clause in MOA, AOA(if it contains capital) ,File SH-7 and then with the valuation report and identifying investor you have to call board meeting, then EOGM /AGM and Pass Special Resolution,..then issue and allot shares to new allottee.. If existing shareholder want to transfer /sell then procedure is different

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