Mgt -14 for isse of shares

Others 691 views 3 replies

Desai

329 Points Joined June 2014

Powers of the Board Section 179 (3) ( c ) : Issue of Securities, including debentures , whether in or outside India

Facts :-

Listed company have proposed in their Board Meeting :-

1) to issue shares under preferential allotment

2) Issue of preference shares

Now the Board meeting has done , after that members approval will be aken at general meeting and again if , its approved , board meeting will be called for allotment.

Query :-

1) We need to file MGT-14 under section 117 (3)(g) for the above issue .

now query is issue means which board meeting to consider before general meeting or after general meeting(allotment)

Pls suggest

Replies (3)

Pratik Shah

Practising Company Secretary

4432 Points Joined October 2014

You need to consider the board meeting in which issues of shares is considered and not the Allotment of shares. There is huge difference between 'Issue of Shares' and 'Allotment of Shares'

Desai

329 Points Joined June 2014

thanks for prompt reply,

I understand but one technical interpretation is that unless n untill shareholders approves the same , how company can issue the same ? so it can be after gm ?

contrary view solicited.

Pratik Shah

Practising Company Secretary

4432 Points Joined October 2014

Section 179 is about powers of Bopard. Since Board is passing a resolution for issue of shares (subject to approval of members), you need to file MGT-14 for this board resolution, since board has taken decision to issue shares. Taking approval of members is an additional requirement for Preferencial issue.

In any case, issue of shares mentioned in Section 179 does not mean the allotmment of shares which you are doing after GM.

As you know, in Rights Issue, members' approval is not required. In that case, we file MGT-14 for the board resolution passed in first meeting where the issues of shares is approved and not for the second meeting where the allotment is approved. And in fact, you will have to file Board resolution of allotment in Return of Allotment (PAS-3). So, there is no logic of filing it again with MGT-14.