Preferential allottment

dear neha,

now the company cannot allot shares at book value. u can pass a fresh special resolution for preferential allotment at book value.

no formalities for not alloting shares as per special resolution passed on 29-09-2012.

no time limit between two preferential allotments.

regds,

sangram 9422622828.

It is presumed that you are talking about an unlisted public company. Point wise reply from my side would be as follows:

1. It is not advisable to allot shares to the proposed allottee without money.
2. Allotment on face value is totally dependent on the language of the resolution passed in BM and AGM. If you have approved the allotment price in the BM and AGM then you have to convene another GM to make allotment on face value.
3. Nothing is to be done regarding no allotment to the proposed allottee.
4. No time limit prescribed by companies act between two preferential allotment.

Dear Neha ji,

In case of Unlisted Public Companies, first of all a Special Resolution under section 81(1A) need to be passed, wherein following points are to be disclosed in the notice for hte general meeting:

1. The price or price band at which allotment is proposed;

2. the relevant date on the basis of which price has been arrived at;

3. the objects of the isue through preferential offer;

4. the class or  classes of persons to whom the allotment is proposed to be made;

5. intention of promoters/directors/key management persons to subscribe to the offer;

6. shareholding pattern of promoters and other classes of shares before and after the date offer.

Secretarial Checklist for preferntial allotment of shares by an Unlisted Public Company.

1. Whether there is a provision in the Articles of Association authorizing the Board to make preferential allotment. If no, then amend the articles;

2. Whether there is adequate unissued equity capital in the authorised capital. If no, then amend capital clause of the Memorandum of Association and increase the authorised share capital first;

3. Fixing price of issue and terms of issue;

4. Obtain a certificate from the Auditors or Practicing Company Secretary stating that the issue is as per the rules, which shall be placed before the general meeting, which will consider the preferential issue;

5. Finalize the content of Notice and explanatory statement and ensure all the disclosures are adequately made in the notice;

6. Pass Special Resolution and file form 23;

7. Ensure proper share application form along with application money as per the terms of issuance;

8. Allot the shares in duly executed Board meeting and file form 2 accordingly.