Get Mobile Updates on Recent Tax Changes. Go CAclubindia PRO. Subscribe Now!

Shares in pvt. ltd company

Pvt ltd 360 views 1 replies

Nishith

Business

34 Points Joined January 2014

Hi, I'm from USA and want to form a pvt. ltd company in India. We'll be getting Foreign Investments in India to execute our projects. My questions are following:

1) Can I and my co-founders suscribe to and hold around 20,000,000 common shares on paid up capital of Rs. 1-2 lacks?

2) Can We authorize and issue Convertible Preference Shares at the price of Rs. 3000 each on 7% interest?

3) Can we issue common share with premium in Pvt. Ltd company?

4) Can we buyback Contertible Preference Shares by paying off necessary amount to the investors?

Please let me know. I really appreacite all the help! Thanks!

Replies (1)

P C Agrawal

Registered independent director Past Ch

8229 Points Joined March 2007

1) Yes, you can - Balance amount can be paid later.

2) You cannot form a company with only preference shares. You must have some equity shares first. After incorporation, you can issue preference shares.

3) Yes, you can. But for it will be difficult to justify premium in new company at the time of incorporation.

4) Yes, you can, subject to restrictions in Section 77A of Companies Act 1956.