CS
2930 Points
Joined April 2016
As per the provisions of Section 62 of the Companies Act 2013, the amount payable to Directors can be utilized by issuing the shares.
Suppose the Company has taken the loan from the Directors and instead of repaying the Loan, the Company can issue the shares to the Directors instead of loan. Provided that before obtaining the loan amount, there must be the agreement between the Company and the Directors that such loan amount shall be converted into equity and company shall pass special resolution before obtaining loan in general meeting. Company shall file MGT 14 within 30 days of passing special resolution.
Next step is to convert the loan into shares by passing the Board resolution and issue the shares by filing Form PAS 3 within 30 days of passing board resolution.
Within 30 days of issue of shares, the Company shall issue the share certificates