equity shares with no voting rights

[anjali bansal]

Dear Friends

 

Pls guide wether a Company having paid up capital of Rs. 6 crores can issued further equity shares with no voting rights. However, their right to received notice and attend AGM/EGM and right to received dividend shall be same as that of existing share holders.

 

Kindly treat this as very urgent.

 

Thanks

 

Anjali

[Premnarayan Tripathi]

Dear Ms. Anjali

 

Equity shares with NO VOTING RIGHTS will defeat the very purpose of being owner of a company.

 

You can adhere to following procedure;

 

1.       Categorize equity shares in two classes; Class A and Class B

2.       Effect necessary amendments in MOA & AOA of the company

3.       Class A will be existing shares/promoter shares and will have one share – one vote

4.       Class B will be issued to new shareholders / investors and will have 100/1,000/10,000 shares – one vote

 

In this manner you can protect promoters from substantial dilution of their voting rights and also complying with provisions of law.

 

Thanks & regards,

CS. Premnarayan Tripathi

PRT & Associates,

Company Secretaries

201, Sarthik Square, Nr. GNFC Info Tower,

S G Highway, Ahmedabad - 380054

Tel: (O) 079 6545 1206

(M): +91 89800 26497

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

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[renukameera91]

Dear Friend,

We shall issue DVR shares, provided on complying, " The Companies ((Issue of Share Capital with Differential Voting Rights) Rules, 2001".

With Regards,

C.Renuka

[anjali bansal]

Friends,

 

for issuin DVR, the said rules need to be compled with. As per the said rules, the issuer must have distributable profits for 3 yrs in terms of section 205. HOwever, in our case, we are entring into an agreement and we are undertaking to issue DVR after 10 yrs. Since, at this point of time, it is impossible to say wether or not the company will have profits after 10 yrs., can we enter into the agreement now?

 

Is it permissible?

[renukameera91]

Dear Friend,

Your Company is listed or unlisted?

With Regards,

C.Renuka

[anjali bansal]

Its a Private Company

 

 

Thanks

 

Anjali

[renukameera91]

Dear Friend,

We shall issue DVR with some form of voting rights but not with nil voting rights. Please refer Sec-86 of CA, 1956.

With Regards,

C.Renuka

[anjali bansal]

Thanks everyone!

[Jayashree Chandrasekaran]

First point you will have to tell whether the company is Private or Public...
A private company is free to issue shares with differential voting rights
A public company has to look into whether there are 3 years profits
and other parameters...hence pls be specific when you ask a
query...since answers can go wrong under wrong presumptions
Jayashree

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[shailesh goyal]

Dear Jayashree

Please let us know does it really make any difference if shares having differential voting rights are issued by Public Ltd. or Private Ltd. Company?

As far as my knowledge is concerned section 86 and corresponding rules are equally applicable to both type of companies. 

Correct me if i am wrong. 

Regards

Cs Shailesh Goyal

[Jayashree Chandrasekaran]

We have had a discussion on this point earlier....check Sec
90....Private companies are exempt and only the public companies will
have to follow the rules for issuing shares with differential voting
rights
Jayashree

[shailesh goyal]

Thanks for updating me on the captioned subject. As per section 90(2) of the Act, section 85 to 89 doesn't apply to a Pvt. Ltd. Company. Can it be construed in a way that Private Ltd. Company is free to issue any type of share capital i mean even shares having no voting rights?

Regards

Cs Shailesh Goyal

[shailesh goyal]

Hi All 

Can anybody explain the procedure for issuance of shares having no voting rights by Pvt. Ltd. Companies. Also I'll really appreciate if  relevant documents are also provided to me.

Regards

Cs Shailesh Goyal

[trupti chavan]

Dear All,

Please specify, that for private limited Company do not need to comply with The companies (issue of share capital with differential voting rights) rules 2001

Regards,

Trupti C.

 

TRUPTI C

 

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[trupti chavan]

A private Limited Company wants to issue the shares with different rights before 31st march, 2014

Are there any implications according to new Act, 2013 on transactions.

Thanks and Regards,

Trupti C.