Allotment of Shares (Conversion of Unsecured loan to Equity)

[Rakesh]

Dear Members

If someone has converted Unsecured Loan into Equity Shares, plz help me out with procedure and documents for the same

Its bit urgent plz some one help me on this

[Sonia Yadav]

It depends when the unsecured Loan was taken whether it was taken after Co.'s Act 2013 applicability or before that. Different procedures for both

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From: Rakesh <huliha...@gmail.com>
To: CSMysore <csmy...@googlegroups.com>
Sent: Wednesday, December 30, 2015 1:39 PM
Subject: [CSMysore] Allotment of Shares (Conversion of Unsecured loan to Equity)

Dear Members

If someone has converted Unsecured Loan into Equity Shares, plz help me out with procedure and documents for the same

Its bit urgent plz some one help me on this

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[Parul Choudhary]

please tell the procedure if the loan was taken after co's act, 2013

Thanks & Regards

Parul

[CS_SrikanthReddyKolli]

as per section 62 (3) Loan can be converted in to shares provided that at the time of obtaining loan the terms and conditions shall contain an option for conversion and such terms have been approved before taking such loan by share holders by way of special resolution.

so, if you don't comply with above, I guess you cannot convert the said loan to shares.

learned members opinion is solicited further

[Sonia Yadav]

If loan was taken after Co.'s Act 2013 applicability, then it should be taken as prescribed u/s 62(3):

U/S 62(3) COMPANIES ACT 2013(CONVERSION OF LOAN/DEBENTURES INTO EQUITY)

1.       PASS SR FOR APPROVING THE TERM FOR CONVERSION OF LOAN INTO EQUITY. FILE MGT-14 FOR PASSING SR

2.       At the time of Conversion:

Pass BR AND FILE PAS-3

3.       ISSUE SHARE CERTIFICATES AND FILE MGT-14 FOR ISSUE OF SHARES.

Incase it was not pre decided that Loan shall be converted into Equity and in Agreement No conversion clause was there, then u may allot shares as Right Issue, after getting renunciation letter from other shareholders and adjusting  o/s Loan amount by Increasing Share Capital. If you can ask your consultant/Auditors regarding this.

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From: Parul Choudhary <parul.cho...@gmail.com>
To: "csmy...@googlegroups.com" <csmy...@googlegroups.com>
Sent: Wednesday, December 30, 2015 6:09 PM
Subject: Re: [CSMysore] Allotment of Shares (Conversion of Unsecured loan to Equity)