Conversion of loan to equity

[CS Nidhi Parekh]

Dear All

Is it mandatory that an extra ordinary general meeting of members be convened and special resolution before availing loan.

Or company is allowed to pass SR after taking loan but before issuing shares for conversion of loan to equity ? 

What if the company has not passed any special resolution before availing loan 

[CS Chetan bakshi]

at the time of taking such amount as unsecured loan, a separate agreement needs to be passed in which approval from shareholder needs to be taken. Moreover, in that agreement, a specific condition for conversion of such loan into must exist.

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Dear Sir,

Please find attached a copy of  along with the mail

   

CS Chetan Bakshi
M/s Chetan & Associates
1st Floor, W.S.191,
Basti Sheikh, Near Old Division No.5
Jalandhar

9781893651 (M)

9417713468 (o)

SAVE PAPER - THINK BEFORE YOU PRINT!

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[Ajaykumar Vishwakarma]

Yes, it will be mandatory to mention all particulars of loan and terms of conversion.

Best Regards,

Ajay Vishwakarma

+91 9022957279

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[CS Nidhi Parekh]

Provisions of section 42 are also applicable incase of conversion of loan to equity ?

Regards
CS Nidhi Parekh

On Mon, 9 Oct 2023 at 8:50 PM, CS Nidhi Parekh <nidh...@gmail.com> wrote:

About valuation report need to be mentioned in extra ordinary general meeting ? 

Regards

CS Nidhi Parekh

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[Prem Tripathi]

For conversion, section 42 won’t apply.

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[CS Nidhi Parekh]

Dear All

Before availing loan company has to take approval shareholders incase the company is willing to convert the loan into equity in future.

Whether company again has to take approval of shareholders before issue of shares upon conversion of loan to equity ?

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[CS Nidhi Parekh]

Before availing loan company has to take approval shareholders incase the company is willing to convert the loan into equity in future.

Whether company again has to take approval of shareholders before issue of shares upon conversion of loan to equity ?

can anyone revert

[CS Nidhi Parekh]

Before availing loan company has to take approval shareholders incase the company is willing to convert the loan into equity in future. Form MGT14 for this purpose filed

Whether company again has to take approval of shareholders before issue of shares upon conversion of loan to equity ?

or  post filing of mgt14 for availing loan purpose can company directly convene board meeting for allotment and file Form PAS-3?

[Anirudh Tanvar]

Hi Nidhi,

Can directly call a board meeting and file PAS-3.

terms of conversion can be finalised at the time of taking loan or at the time of conversion subject to valuation.

Pl get in touch over call if still have any queries regarding the same.

Kind Regards,

Anirudh  Kumar Tanwar

M.Com (Accounts & Business Statistics)

Practicing Company Secretary

Registered Valuer - IBBI

Peer Reviewer -ICSI

Cell - 8268649291

[Shital Bagmar]

Respected Members, 

How to execute conversion of unsecured loan from directors into equity. When MGT14 with special resolution not passed at the time of taking loan. and loan from directors taken at different times when company was in need of funds. and now company want to convert such loan into equity. So as nidhi mam mentioned can we file MGT and pass resolution at the time of converting loan into equity and not at the time taking loan.

Since the company is having negative reserve and want to convert loan into equity on face value only do we still required valuation report.

Kindly share documentation for same at csshita...@gmail.com for reference only  as there is lots of confusion to execute same