Section 81

Section 81 is applicable to a public company. As company is going to allot further shares to the existing shareholders there is no applicability of section 81(1A). There is no need to go for the compliance of section 81(1A).

You may simply allot shares to the existing shareholders by passing a board resolution for allotment and file form 2 with ROC within 30 days of allotment.

Regards

Sir,

Query 1

As replied by you that only Board meeting is sufficient but According to Section 81(1A) Special Resolution  is required if you want to issue further shares whether to existing holders or to the persons other than existing holders

Query 2

Futher i would like to ask :

1. whether section 81(1A) is applicable if two yrs has not expired from the incorporation of the Company or one yr is not expired from the first allotment

2. whether Section 81(1A) is applicable to both existing shareholders and other than existing hlders

3. what is the differnce between Section 81 and section 81(1A)

Hi

Section 81 is applicable in case of allotment to existing shareholders. Further, allotment is to be done in the same proportion in which existing shareholders are holdind previous shares.

QUERY 2

1. Section 81(1A) is applicable if two yrs has not expired from the incorporation of the Company or one yr is not expired from the first allotment.

2. Section 81(1A) is applicable to both existing shareholders (in case if  further allotment is to be done not in proportion of their existing shareholding) and other than existing hlders.

suman ji

In same proportion means

if out of Rs.1,00,000 paid up capital existing sharholders is holding Rs.50,000 of the paid up capital (50%)

and the limited company proposes to issue Rs.50,000 by way of equity capital. and offer to the existing  shareholder to subscribe 50% of the Capital i.e 25,000

Am i Correct

Same propotion means the proportion in which existing shareholders have shareholding in paid up capital.

Suppose:

A's Shareholding: 50%

B's Shareholding: 10%

C's Shareholding: 40%

If further allotment is to be done the after allotment there shareholding shall remain in same proportion as they had before allotment.

hi,

If a public co. propose to make allotment to all the existing shareholders, then it is case of Right issue and section 81 will be applicable. If the co. propose to allot shares only to selected shareholders among the existing shareholders then section 81 (1A) will be applicable.

Dear suman  khurana ji

 i have received a reply as below  please clarify on this

If a public co. propose to make allotment to all the existing shareholders, then it is case of Right issue and section 81 will be applicable. If the co. propose to allot shares only to selected shareholders among the existing shareholders then section 81 (1A) will be applicable.

Hi

Two things need to be taken into Consideration:

1. To whom allotment is to be made. 2. In what proportion shares will be allotted.

A. If allotment is to be made to all existing shareholders and also in the same proportion in which they have existing shareholding i.e. post allotment their % shareholding does not change then Section 81 applicable.

B. If allotment is to be made to all existing shareholders but not in the same proportion in which they have existing shareholding i.e. post allotment their % shareholding changes then Section 81 is not applicable. Section 81(1A) applicable)

C. If allotment is to be made to some existing shareholders and not to all then Section 81 is not applicable. Section 81(1A) applicable)

Hi,

Our company is a Public Limited Company (incorporated in December, 2011) having 7 members. 

We want to issue further shares to only 2 existing members. In this case is Section 81 (1A) is applicable ?

Can we do so if we obtain NOC from other existing Shareholders and issue & allot the Shares in Board meeting without following procedure of Section 81 (1A) ?

If not, please explain me step by step procedure and documents involved.

Kind Regards

Gaurav Mishra

Hi,

Our company is a Public Limited Company (incorporated in December, 2011) having 7 members. 

We want to issue further shares to only 2 existing members. In this case is Section 81 (1A) is applicable ?

Can we do so if we obtain NOC from other existing Shareholders and issue & allot the Shares in Board meeting without following procedure of Section 81 (1A) ?

If not, please explain me step by step procedure and documents involved.

Kind Regards

Gaurav Mishra

Originally posted by : Gaurav Mishra
	Hi, Our company is a Public Limited Company (incorporated in December, 2011) having 7 members.  We want to issue further shares to only 2 existing members. In this case is Section 81 (1A) is applicable ? Can we do so if we obtain NOC from other existing Shareholders and issue & allot the Shares in Board meeting without following procedure of Section 81 (1A) ? If not, please explain me step by step procedure and documents involved. Kind Regards Gaurav Mishra

Dear Gaurav,

Your case is a case of preferential allotment. You have to follow the procedure given in Section 81 (1A). NOC would be off no use.

Procedure:

1. First hold BM and final proposal of preferential allotment. In this BM fix time and date of General Meeting
2. On due date hold the General Meeting and pass the special resolution as required by Section 81 (1A).
3. Within 30 days of General Meeting, file form 23 with ROC for registering the special resolution.
4. After that hold a BM for allotment of shares.
5. File form 2 with ROC within 30 days of allotment in the BM.   

Regards