What is the process to issue preference shares and what are the conditions to issue it? and whom it has to issue?
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Urgent please
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1. Special Resolution is required to be passed u/s 81(1A) of the Companies Act, 1956. 2.Unlisted Public Companies (Preferential Allotment) Rules, 2003, is required to be followed. 3.No issue of shares on a preferential basis can be made by a company unless authorized by its articles of association and unless a special resolution is passed by the members in a General Meeting authorizing the Board of Directors to issue the same. The special resolution shall be acted upon within a period of 12 months. 5. Pricing.- Where warrants are issued on a preferential basis with an option to apply for and get the shares allotted, the issuing company shall determine before hand the price of the resultant shares. 6. Disclosures.- The explanatory statement to the notice for the general meeting as required by section 173 of the Companies Act, 1956 shallcontain the following particulars: (a the price or price band at which the allotment is proposed; (b the relevant date on the basis of which price has been arrived at (c the object/s of the issue through preferential offer; (d)the class or classes of persons to whom the allotment is proposed to be made; (e)intention of promoters/directors/key management persons to subscribe to the offer; (f)shareholding pattern of promoters and others classes of shares before and after the offer; (g) proposed time within which the allotment shall be completed; (h) whether a change in control is intended or expected. Audit Certificate.- In case of every issue of shares/warrants/fully convertible debentures/partly convertible debentures or other financial instruments with conversion option, the statutory auditors of the issuing company / company secretary in practice shall certify that the issue of the said instruments is being made in accordance with these Rules. Such certificate shall be laid before the meeting of the shareholders convened to consider the proposed issue. |
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