Deepanshu Aggarwal (NA) (115 Points)
26 April 2010Dear frnds
"A" is the public limited company.
The company wants to make further issue of shares to A,B.C (existing shareholders) of the Company
Can the Company make such issue under section 81(1A) without complying with the provisions of Section 81(1)
Ankur Garg
(Company Secretary and Compliance Officer)
(114783 Points)
Replied 26 April 2010
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
Deepanshu Aggarwal
(NA)
(115 Points)
Replied 26 April 2010
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)
Suman Khurana
(ACS)
(209 Points)
Replied 26 April 2010
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.
Deepanshu Aggarwal
(NA)
(115 Points)
Replied 26 April 2010
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
Suman Khurana
(ACS)
(209 Points)
Replied 26 April 2010
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.
Narendra Verma
(Senior Executive)
(116 Points)
Replied 26 April 2010
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.
Deepanshu Aggarwal
(NA)
(115 Points)
Replied 26 April 2010
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.
Suman Khurana
(ACS)
(209 Points)
Replied 27 April 2010
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)
Gaurav Mishra
(Management Trainee)
(40 Points)
Replied 21 May 2012
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
Gaurav Mishra
(Management Trainee)
(40 Points)
Replied 21 May 2012
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
Ankur Garg
(Company Secretary and Compliance Officer)
(114783 Points)
Replied 21 May 2012
| 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:
Regards
CAclubindia
