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Restrictions on allotment of shares by pvt ltd co
Hi Friends,
A Private Limited Company has taken a Secured Loan from a Financial Institution and form 8 is filed. Now the Financial Institution is insisting on becoming a member in the company...
My doubt is whether a Private Limited Company can Allot or say even Transfer atleast One Share to the Financial Institution ? Will it become a Deemed Public company due to this .... Or will it attract any other violation ...
Thanks ......
Replies (4)
Thanks for the clarification Neha :) :)
No
It will not become a deemed public company on account of allotment to Financial Institution. You may allot shares to the F.I.
However on this kind of loan transaction FI usually appoint Nominee Director on the board of borrower to safeguard the interest of FI.
RG
Yes, you can allot shares to the Financial Institution.
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