Conversion of loan in to equity || Valuation report is required

[Chandrika Rao]

Dear Members,

For Conversion of loan in to equity, since company is not able to repay the loan to directors.

Please let me know whether a Valuation report is required  ??

Regards,

Chandrika R

[sagar mulchandani]

If the equity is being given on FV then no VR is required. However, you must have a special resolution before granting the loan regarding the conversation. And the same is required to be filed with the conserned RoC.

Regards,

Sagar

8732947772

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[Pankaj Khandelwal]

Hi Chandrika,

Your case might fall under section 62(1)(c) and valuation report would be required as per the requirements of the provisions mentioned therein.

If the terms of the conversion were already there at the time of loan received then it will fall under section 62(3) and prior approval was necessary for this term to include at that time. There is no requirement of valuation report in the provisions here.

[Itisha Ghorawat]

Agreed with Pankaj Ji, no valuation report will be required. The only concern is that if you have not passed a special resolution at time of taking loan that loan can be converted into equity, you need to pass a back dated resolution and file MGT-14 with late fees. 

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[Chandrika Rao]

If we file mgt 14 back dated it wil be condolenation of delay and again CG 1 we need to go?

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[Anirudh Tanvar]

As per me, how the value of shares to be arrived at, has to be on the basis of Valuation report.

for further issue of shares other than right issue and bonus issue, valuation report is required

Best Regards,

Aniurdh Tanwar

PCS & Registered Valuer

8268649291

[Hardik Jetani]

As far as my understanding, Act is silent on the matter. It totally depends on terms and conditions agreed between the lenders and Company, at the time of availing loan. Neither provision of Section 62 (1) and 62 (2) is applicable nor Section 42. However, one may obtain valuation report for Income Tax purpose. 

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Regards,

Hardik Jetani
(Proprietor)
HARDIK JETANI & ASSOCIATES
Company Secretaries | Trademark Attorney
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[Itisha Ghorawat]

Anirudh ji

Shares will be taken at their face value.

On Wed, Apr 13, 2022, 2:47 PM Anirudh Tanvar <csani...@gmail.com> wrote:

As per me, how the value of shares to be arrived at, has to be on the basis of Valuation report.

for further issue of shares other than right issue and bonus issue, valuation report is required

To view this discussion on the web visit https://groups.google.com/d/msgid/csmysore/a7096777-883b-47bb-819a-99a84c95dd54n%40googlegroups.com.

[JAI PRAKASH Jagdev]

Valuation Report is must.

J P JAGDEV

CS

M.A., LL. B., M.B.A. FCS

22-A, KANSHI NAGAR

MODEL TOWN,

AMBALA CITY -134003

HR IN

99960 20660

94160 20660

On Wed, Apr 13, 2022 at 1:01 PM Pankaj Khandelwal <con...@cspankaj.in> wrote:

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[sagar mulchandani]

Show the date of MGT within 300 days then no condonation will require.

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