SEC 81(1A)

No. 

A public company can not alott shares to persons other than existing shareholders without applying sec 81(1A).

Regards

Hi Swati,

 In case of further issue of shares to non existing shareholder of public company u must comply section 81 of the Companies Act, 1956.

Regards

Dear Swati

In case of further issue of shares, shares must be offered to the existing shareholders and after the expiry of the time specified or on receipt of earlier intimation from the shareholder that he decline to accept the shares offered, the BOard of directors may dispose the shares of them in such manner as they think most beneficial to the company.

In case the company want to offer shares to the persons other that its existing shareholders it must have to comply section 81(1A).

I fully agree with the views mentioned herein. A Public Company cannot issue shares to other Shareholders without Complying with the provisions of section 81(1A).

I further need a clarification that whether a Public Company can issue Shares to outsiders if the allotment is within one year of the first Allotment i.e. the time limit as mentioned in section 81(1). 

yes ...public co. can issue further shares to outsiders as per sec 81(1)  (c) i.e only if the existing shareholders (if The articles provide)renounces the shares in favour of any other person and and as rightly pointed out by Mr.Ankur that  after the expiry of the time specified in notice the BOD may dispose off the shares as most beneficial to the company.

Yes, in case the company is issuing shares within 1 year of the first allotment, the company can offer the shares to the persons other that its existing sharehollders and section 81 would not apply and it would not be treated as further issue of shares.

yes i agree to mr.ankur....an allotment made within one year can be made to outsiders and sec 81(1) will not apply.

yes,rite...

sir please tell me about sec 81

Kindly Explain what is the defination of first allotment??? Will subscrption to the memorandum considered as first allotment?

Obviously Subscripttion to the MOA is the First Allotment.

Because when you enter the No. of shares in the MOA/AOA it is considered as subscribed at that time.

Then after the Company is Incorporated and the Shares are allotted in the Board Meeting.

Obviously Subscripttion to the MOA is the First Allotment.

Because when you enter the No. of shares in the MOA/AOA it is considered as subscribed at that time.

Then after the Company is Incorporated and the Shares are allotted in the Board Meeting.

Can anyone give me  Special resolution passed under section 81(1A)

Can anyone tell me the consequenses of non-comlaince with section 81(1A) and unlisted public company rules, 2011. Whether the allotment can be termed as void, voidable or just penalty would be charged.

Irregularities are as follows:

- Special resolution is 1.5 year old before allotment.

- Special resolution is filed to ROC after 4 years.