PROCEDURE
FOR ALLOTMENT OF SHARES ON RIGHT BASIS FOR PRIVATE LIMITED COMPANIES:
1. Issue notice in writing to
every Director at least seven days’ before convening the Board meeting. (Sec 173(3))
2. Convene a Board Meeting.
3. Pass a Board resolution for
approving “Letter of Offer”. The offer
letter shall include right of renunciation also.
4. Dispatch Letter of offer to
all existing shareholders through registered post or speed post or through
electronic mode at least three days before the opening of the issue. In case of Private companies if ninety
percent of the members of company give their consent in writing or in
electronic mode, the time limit of three days before the opening of the issue
shall not apply.
5. Receive acceptance,
renunciations, rejection of rights from shareholders.
6. Issue notice in writing to
every Director at least 7 days’ before convening Board meeting. ( 173 (3))
7. Convene a Board Meeting
8. Pass Board resolution for
approving allotment and issue of shares.
9. File with Registrar a return
of allotment in E-Form PAS-3 within 30 days of allotment of shares.
1. File E-for MGT 14 within 30
days of Issue of securities. (Not applicable in case of private companies)
OTHER
DETAILS:
1. There is no prescribed format
for Letter of offer” to be issued, in case of right issue of securities. Format of “Letter of offer” prescribed in
Companies Act, 2013 in Pursuant to section 42 and rule 14(1) of Companies
(Prospectus and Allotment of Securities) Rules, 2014 and not for section 62. Hence
a letter of Offer may be issued to the
members of the company.
2. Letter of offer shall specify
the number of shares offered and other information and limiting a time not
being less than 15 days and not exceeding thirty days from the date of the offer
within which the offer, if not accepted, shall be deemed to have been declined;
In case of Private companies if ninety percent of the members of company give
their consent in writing or in electronic mode, the time limit of fifteen days
shall not apply.
3. Attach with E-Form PAS –
3
(i) Board Resolution for
allotment and issue of share.
(ii) Letter of offer.
(iii) List of Allottees.
4. List of Allottees attached
with E-Form PAS-3 shall state the names, address, occupation, if any, of the
shareholder and number of securities allotted to each of the allottees and the
list shall be certified by the signatory of the Form PAS-3 as being complete
and correct as per the records of the company.
5. Valuation certificate of Right
shares is necessary in case of Non Resident Shareholders. It is not required for Indian shareholders.
6. After the Rights issue
allotment is complete, issue the share certificate and make necessary entries
in the Register of Members .
Sir,
ReplyDeleteCan you please give reference of the Circular which gives exemptions to private compnies for noy filing Form MGT-14 for issue of shares,
As per my view Section 179 (d),(e) & (f) is only exepted to private companies which does not say anout issue of shares
Section 117 (3) (g) is not applicable to private companies vide notification dt.05.06.2015. Hence section 179 (3) also gets exempted.
DeleteCan a shareholder apply for shares more than that offered by company (that excess not on account of renunciation)? Can the company allot such excess shares in case it is available on account of rejection by other shareholders? Though have seen this happening in listed companies, are there any restrictions on private limited companies?
ReplyDeleteExact allotment of shares can only be decided after final settlement. First of all I was not aware of what is equity and what are its benefits. Got knowledge from my friend and her husband. They are enjoying good returns in their investments done through a financial planner.
ReplyDelete