share warrants

[CS mohd sagir]

want some help

One of my Client company (Public limited) want to issue share warrants to their Employees but there is no provision regarding share warrants under new companies act 2013

what should I do?

[Vivek Hegde]

Dear Friend,

Yes. I agree. There is no provision under the companies act, 2013. But I am not sure whether warrants can be issued since there is no prohibition. Its like ESOPs under CA 1956. There were no provision but companies used to issue.

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[K. Sankara Subramanian]

http://www.icsi.edu/Portals/22/ROC%27s_views_on_queries_raised_by_ICSI_members_@_the_3rd_Interactive_Session_on_23.09.14%5B1%5D.pdf

In Pg. 5, Point 19 deals with this issue:

19. Under the Companies Act, 1956, provision for issue of Share Warrant by public limited companies was there under Section 114 & 115. However, there is no such provision under the Companies Act, 2013. Can both private & public companies issue share warrant now or is it completely prohibited ? If the issue is allowed, what is the procedure to be followed for the same?

ROC’s views : Concept of share warrant no longer exists in CA, 2013.

[Mohammad Khalid]

I have recently issued the warrants which are convertible into equity shares. Issuance of warrants are purely contractial in nature & there is no prohibition under he ACT for the issuance of the same.

As a good practice you can amend the articles & includes the provision of issuance of warrants & also pass the SR for issuance of warrants to the employees.  

Regards,

Mohammad Khalid