Allotment of shares in 60 days

[Manuj Kansal]

Since as per the new act, shares need to be allotted with in 60 days, therefore, we have to allot shares in a private company in which the share application money was received in the previous year/ years. However, we are allotting the shares on 30th May, 2014 to comply with the provisions of the new act. Has anyone made such allotments. What is the procedure for the same? I understand that PAS-4 & PAS-5 may not be required since the application money is already received before 31 March 2014.

[Manuj Kansal]

[Shraddha Singhi]

Manuj,

Even i am doing same.
Calling B.M. allotting sharees and now going ahead further.
Filing of form PAS -3 and list of allottees...anyone having idea what
else would form part of attachment or compliance.

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Best regards,
Shraddha Singhi
Company Secretary
in.linkedin.com/pub/cs-shraddha-singhi/46/368/12a/
*"Try hard to get what you love or you will be forced to love what you
get."*

[Devansh Garg]

list of allottes and board resolution is sufficient.

private placement offer and other docs are required when the shares are issued to new shareholder

[Ranjani Vaidyanathan]

Also file form MGT 14 before pas 3.

Regards,
Ranjani V

[Shraddha Singhi]

could u plz clarify why mgt . 14 need to be filed.

[KHUSBU KHEMKA]

Even i didnt get why MGT-14 needs to be filed

Regards

ACS KHUSBU KHEMKA

[Manuj Kansal]

I think MGT-14 is required as per Section 117(3) r.w.s 179(3)(c) 

[Ranjani Vaidyanathan]

Correct Manuj, that is the reason i am saying to file MGT-14.

Regards,

Ranjani V

[Manuj Kansal]

Do we also need to file MGT14 for the SR passed in pursuance of Sec 62(1)(c) or we do not need the SR?

[Ranjani Vaidyanathan]

If your going by section 62(1)(c) then you have to follow section 42 pvt placement. SR is to be passed as per 42 and should be filed in MGT-14 with ROC.

Regards,

Ranjani V

On Tue, Jun 10, 2014 at 2:02 PM, Manuj Kansal <manuj...@gmail.com> wrote:

Do we also need to file MGT14 for the SR passed in pursuance of Sec 62(1)(c) or we do not need the SR?

Thanks & Regards,

Manuj Kansal
+91 9999995673

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[Manuj Kansal]

Do we have an option of not following Sec 42 mechanism and just issue the shares on the basis of a BR and file MGT 14 & PAS-3 posst that?

[Ranjani Vaidyanathan]

If you are allotting shares to existing shareholders and employees than you can avoid section 42 as it is not required.but if your allotting shares to other than the above than you have to follow section 42 compliance.

Regards,

Ranjani V

[Manuj Kansal]

Is there any provision in the Act which states the same ?

On Tuesday, June 10, 2014 2:17:38 PM UTC+5:30, Ranjani Vaidyanathan wrote:

If you are allotting shares to existing shareholders and employees than you can avoid section 42 as it is not required.but if your allotting shares to other than the above than you have to follow section 42 compliance.

Regards,

Ranjani V

On Tue, Jun 10, 2014 at 2:12 PM, Manuj Kansal <manuj...@gmail.com> wrote:

Do we have an option of not following Sec 42 mechanism and just issue the shares on the basis of a BR and file MGT 14 & PAS-3 posst that?

On Tue, Jun 10, 2014 at 2:08 PM, Ranjani Vaidyanathan <sweety...@gmail.com> wrote:

If your going by section 62(1)(c) then you have to follow section 42 pvt placement. SR is to be passed as per 42 and should be filed in MGT-14 with ROC.

Regards,

Ranjani V

On Tue, Jun 10, 2014 at 2:02 PM, Manuj Kansal <manuj...@gmail.com> wrote:

Do we also need to file MGT14 for the SR passed in pursuance of Sec 62(1)(c) or we do not need the SR?

[Ranjani Vaidyanathan]

CHECK SECTION 62 AND NCA Rules_Chapter4 (Share Capital and Debentures) Rule no. 13. Issue of shares on preferential basis.

Regards,

Ranjani V

[Manuj Kansal]

Sorry but I was asking if there is any provision which states that "if you are allotting shares to existing shareholders and employees than you can avoid section 42"

[Shraddha Singhi]

Explain this:

if shares being allotted for application money pending to new people
and none of the existing shareholders.
this would be covered under perview of private placement or
preferential allotment.
What is to be checked.
And in turn MGT 14 would be filed or not.

On 6/10/14, Manuj Kansal <manuj...@gmail.com> wrote:
> Sorry but I was asking if there is any provision which states that
>

> *"if you are allotting shares to existing shareholders and employees than
> you can avoid section 42"*On Tuesday, June 10, 2014 2:32:43 PM UTC+5:30,

>>> datta...@gmail.com <javascript:> and Manager: vivekhe...@gmail.com
>>> <javascript:>

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[Ranjani Vaidyanathan]

Pvt placement and MGT-14 for fliling of SR.

Regards,

Ranjani V

[periwal...@gmail.com]

I also want to know that where it is written that if we want to allot shares to existing members itself, sec 42 is not applicable in such case?

[Ranjani Vaidyanathan]

Please read and understand section 62.

Regards,

Ranjani V

[periwal...@gmail.com]

No ways madam,

 

It says about offering shares to existing members of company. It is an open offer exercisable by all members of company. Rights is generally an offer to all shareholders to buy shares of company. It no where says that it is offered to certain members of company.

 

Neither Sec 42 excludes offer made to existing members of the company.

 

Then how come you arrive at an understanding that private placement offer regulations will not be applicable in case of issue of shares to existing members. 

 

I am asking about if a company wants to issue shares to one or some and not all the members of company, then also sec 42 wil not be applicable?

[SUDHIER KUMAR GUPTHA]

If allotment is made to few of the existing shareholders in disproportion to their existing stake, can we  avoid it mam?

[SUDHIER KUMAR GUPTHA]

At devansh- Private Placement Offer Letter is required even when shares are being allotted to existing shareholders also.

Ref: 62 (1) (C) and Rules under chapter IV.

@ RANJANI. MGT 14 needs to be filed even under 179(3)(c) after allotting shares.

[SUDHIER KUMAR GUPTHA]

In fact two MGT 14s needs to be filed.

1) For attaching Extracts of EGM  and other documents under 117.

2) For  Compliance under 179(3)(c)

Note:1) If at all calling for EGM, Circulation of PAS 4 and allotment is done under 30 days, Single Form MGT-14 will serve the purpose.

    

    2) If the initial Board meeting for calling EGM is the first board Meeting for this FY, you can optimise MGT 14 for filing Resolution/MBP 1 for Disclosure of Directors Intrest

        

On Tue, Jun 10, 2014 at 1:33 PM, Manuj Kansal <manuj...@gmail.com> wrote:

[SUDHIER KUMAR GUPTHA]

What ever i stated is for normal process wherein share application money is received after 1st April, 2014 and for allotment process under NCA. 

[SUDHIER KUMAR GUPTHA]

62(1)(a) for rights issue.

[Vivek Hegde]

Dear Members,

My understanding of Section 62 relating to rights issue is as under:

1. Offer has to go to all the existing equity shareholders in proportion to their existing shareholding. Mode is registered post/speed post/electronic mode. No hand delivery..!!!

2. Existing shareholder will have an option/right to renounce their right in favor of any other shareholders including an outsider.

3. It may so happen that if all the existing shareholders renounce their rights in favor of third party, shares can be issued to a third party. Through this one can bypass the provisions relating to Private Placement/Preferential allotment.

4. No separate bank account is required to be opened. No minimum allotment of shares having Rs.20,000 face value..!!!!

5. No shareholders resolution is required except for increase in AC

6. No filing of offer letter with ROC

Kindly share your thoughts on the same.

Warm Regards

CS Vivek Hegde,B.com, ACS, CWA

Vivek Hegde & Co.
Company Secretaries
No. 2034, 26th Cross, K.R.Road
Banashankari II Stage, Behind 

Sevakshetra Hospital

Bangalore-560070
Mob : 09900898223

Off: 080 26710677

[Premnarayan]

Dear Friends,

 

I addition to Mr. Vivek’s points,

 

Instead of renouncing, the shareholders may decline to accept the shares offered, the Board may dispose of the same in such manner which is not disadvantageous to the shareholders and the company {Sec.62(1)(a)(iii)}.

 

This gives the unfettered rights to the Board to allot to any one as they deems fit!

 

However, the matter which was initiated in this trailing mail, is still unresolved as to what procedure needs to be followed in case of those companies which have received money before 31.03.2014.

 

Thanks & regards,

CS. Premnarayan Tripathi

PRT & Associates,

Company Secretaries

201, Sarthik Square, Nr. GNFC Info Tower,

S G Highway, Ahmedabad - 380054

(M): +91 89800 26497

E-mail: premnar...@gmail.com

[SUDHIER KUMAR GUPTHA]

There was an article in similar lines by Dr.Chandratre in Chartered Secretary February 2014 version.

[SUDHIER KUMAR GUPTHA]

Link for the same.

https://www.icsi.edu/WebModules/LinksOfWeeks/ICSI_February_2014.pdf