Private Placement by Private companies

[Kasturi Prasad]

Hi all,

 

If anybody has the procedure for issue of shares under private Placement by a private company, can you please share the same?

 

Regards,

Kasturi Prasad

[VIKAS GUPTA]

Hello Kasturi,

 

As Section 81(1A) is not applicable on private company then thre is no need to follow any kind of procedure for private placement...

 

You just have to receive share application money and allot shares to shareholders and file prescribed for 2 to ROC...

--
************************************************
Mail your comments, feedback and suggestions on CSMysore to Moderator: datta...@gmail.com and Manager: vivekhe...@gmail.com
 
Find eNewsletters of ICSI Mysore at: www.icsi.edu/NewsEvents/enewsletters/tabid/1757/Default.aspx

--
THANKYOU
CS VIKAS GUPTA
Assistant Company Secretary
Havells India Limited
9953620278
http://www.vikas1052.blogspot.com/

[Kasturi Prasad]

Thank you so much Vikas.

 

Please confirm whether it is sufficient if a Private Company follows the below steps to issue shares to the identified group of people.

 

1.  Board resolution to consider and approve private placement of shares

2.  Since section 81(1A) is not applicable, no need to obtain members' approval

3.  Issue letter of offer to the identified group of people

4.  Collection of application for shares with application money as fixed by Board

5.  Board resolution to allot shares (Any timeline is applicable to allot shares from the date of collection of application money?)

6.  To file form 2, Return of Allotment with ROC

6.  Dispatch of allotment letters (Any timeline is applicable?)

7.  Issue of share certificates (Any timeline is applicable?)

8.  Board resolution to make calls on shares

9.  Notice of call to be given specifying the exact call amount and time of payment.

 

Regards,

Kasturi Prasad

[ramela rangasamy]

Dear Friend,

Check the empowering provision in AoA?

Check the Share applications from the applicants?

Check the Bank statement or cash book to confirm the receipt of the funds from the applicant?

Check the authorised and paid up capital before allotment and after allotment are adequate? If not comply with Section 94.

Thereafter proceed to pass Board Resolution for making allotment and also issue of share certificate?

File Form no.2.

Make necessary entries in RoM and RoDr and RoDrs. Shareholding.

R.Ramela

---

From: Kasturi Prasad <cskastur...@gmail.com>
To: csmy...@googlegroups.com
Sent: Monday, 26 March 2012 4:12 PM
Subject: [CSMysore] Private Placement by Private companies

[kartheek CN]

Dear Prasad,

Following steps will ensure sufficient compliance for a pvt limited Company:

1. Pass a BR to consider and approve the letter of offer (Not compulsory) - But depends upon the Article and the standards that your Company has adopted.

2. Issuance of LOO is also not required as it is a Private Limited Company a mere Share Purchase agreement would suffice. or a Share application Form will suffice.

3. Ensure that the Company has received the share application money. Check the Company's Bank statement., before allotting the shares.

Submit FIRC Copy of the receipt of the application money within 30days if received from a non resident. through Authorised dealer bank

4. If you have received the share application money from a Non Resident please be informed that according to the RBI guidelines there is a time limit that the shares should be allotted within 180 days. For residents there is no restriction.

5. Pass a Board resolution for allotment of shares and issue the allotment letters ASAP. No time line fixed for a Pvt CO.

6. Please file form 2 - return of allotment within 30 days to avoid additional fees.

And also file FORM FCGPR Part A with RBI if received from a Non resident through Authorised dealer bank within 30 days of allotment.

7. Issue share certificate after paying the Stamp duty applicable to the respective states within three months after the allotment of shares.

8. If shares are partly paid up then make calls on them as and when deem fit. NO time limit for Pvt limited.

I have mentioned all the general provisions mentioned in the Companies Act applicable to a Pvt Company.

Kindly check the Articles of Association for the provisions applicable to Your company.

Hope this helps you out.

PFA the Share Application form

C.N. Kartheek

C.N.Kartheek
karth...@gmail.com

[Kasturi Prasad]

Hi Kartheek,

 

Thank you so much for clarifying the matter with such a clarity.  It is of great help to me.

 

If the company issues shares to its existing employees under private placement (please note it is not under any ESOP), still can we exclude them for the couting the number of members under the definition of 'Private Company'?

 

Please share your views.

Regards,

Kasturi Prasad

[CS Ashok]

Dear Kasturi,

The procedure mentioned by Rameela,Karteek and you is sufficient towards the compliance for a Private Company.

Further persons covered under the employment or were covered under employment will be excluded from counting the members as fifty.

With Regards,

CS Ashok
Bangalore.