What is the procedure to convert unsecured loan into equity share. Unsecured loan is from One of the Director of the Company. Simple Board Resolution of allotment towards unsecured loan is suficient or not ? Which Form is to be filed Form 2 or Form 3 ?
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Procedure to convert unsecured loan into equity share
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Subject to provisions in your Articles, take share application form duly signed, pass Board resolution and file Form 2. In case of public co., follow Unlisted Public Companies (Preferential Allotment) Rules 2003.
Alternatively, preferred option is to exhange cheques to clear transactions separately (one for refund of loan with interest and another for share application money).
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