Procedure-issue of redeemable preference shares listed co

Hi Ekta,

For issue of preference shares of Pvt Company Board Resolution will suffice and for public company, consent of shareholders is required.

Regards

Jaideep Pandya

Format for the resolution can be as follow:

For Issue of Shares

The Chairman informed the Board that in order to augment the long term’s resources to meet the requirement of funds for expanding business activities of the Company, it is necessary to raise Preference Share Capital of the Company. The Chairman then proposed to raise finance by issue of 11% Redeemable Preference Shares (RPS) of Rs. 10/- each. He also proposed that in view of the improving Net Worth, Present market value of Assets of the Company and other factors, the Preference Shares of Rs. 10/- each be issued at a Premium of Rs. __/- per share.

After discussions, the Board unanimously passed the following resolution:

“RESOLVED THAT the Company do issue 00,000 Preference Shares of Rs. 10/- each at a premium of Rs. __/- per share on the following Terms and conditions :-

a) The said Preference Shares shall carry preferential right to receive dividend at the rate of 11% (Eleven percent) per annum in the year in which the Company declares dividend and shall be Redeemable Preference Shares. The dividend in the year in which they are allotted will be in the proportion to the period in respect of which such shares remain paid provided that dividend is declared.

b) Such Preference Shares shall be nomenclatured as “11% Redeemable Preference Shares.”

c) Such Preference Shares shall carry preferential right for repayment of the Capital on the winding up of the Company.

e) The voting rights on such Preference Shares shall be in accordance with the provisions of Section 87 of the Companies Act, 1956 wherever applicable.”

F) Such preference shares have to be redeemed before on or 20 years

FURTHER RESOLVED THAT the Issued Share Capital of the Company be determined to Rs. 0,00,000 divided into 00,000 Equity Shares of Rs. 10/- each and 00,000 Preference Shares of Rs. 10/- each.”

ALLOTMENT OF SHARES:

The Chairman informed that in response to issue of _________ 11% Redeemable Preference Shares of Rs.10/- each for cash at a Premium of Rs. ___/- Per Share, the company has received application for _____ 11% Redeemable Preference Shares alongwith full payment and placed on table the relevant application. The applications were scrutinized and found in order. The Chairman then proposed that _______ 11% Redeemable Preference Shares of Rs. 10/- each be allotted for cash at a Premium of Rs. __/- to the respective applicants. After discussion, it was:-

“RESOLVED that _____ 11% Redeemable Preference Shares of Rs. 10/- each fully paid up be and are hereby allotted to the following applicants for each at a premium of Rs. __/- per Share as per details given below :

Provide Details of Shareholders and Shares

FURTHER RESOLVED that Share Certificates in respect of _____ 11% Redeemable Preference Shares of Rs. 10/- each fully paid up for cash at a Premium of Rs. __/- per share be issued to the respective allottees under the Common Seal of the Company and that the same be signed by Shri XYZ and Shri ABC as Directors of the Company and counter signed by Shri MNP as Authorised Signatory.

RESOLVED FURTHER THAT Shri XYZ, Director of the Company be and is hereby authorised to file Return of Allotment in Form no. 2 with the Registrar of Companies.”