GUIDELINES – ALLOTMENT OF SHARES OTHER THAN CASH- Series 468
GUIDELINES – ALLOTMENT
OF SHARES OTHER THAN CASH
Specifically Non Cash
Allotment
Short
Summary:
In this editorial author discussing
about Provisions of allotment of shares
other than cash consideration & process of same and drafts of the same.
Section/ Rules Involved:
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a.
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Section 62(1)(c)
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[1]Further Issue of
Share Capital
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b.
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Rule 13
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|
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c.
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Section 42
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Private Placement
|
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d.
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Rule 14
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Private Placement
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e.
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Section 39
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Allotment of
Securities by Company
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f.
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Rule 12
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Return of Allotment
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Forms Involved:
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a.
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MGT-14
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Within 30 days of passing of Special Resolution
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b.
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PAS-3
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Within 30 days of passing of board resolution for
allotment of shares.
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A. Whether Company can issue securities like (Debentures,
share warrant etc) by following section 62(1)(c) other than cash consideration?
Section 62(1) states about only issue
of ‘Shares’ its doesn’t include securities. Therefore securities can’t issue
other than cash consideration under Companies Act, 2013.
STEP - PROCEDURE
*Check Whether
Company having power in Article of association for the same.
STEP-1
Call
Meeting of Board Director:
ü Issue Notice of Board Meeting to all the
directors of company at least 7 days before the date of Board Meeting.
ü Attach Agenda of Board Meeting along with
Notice.
STEP-1I
Hold the Board Meeting:
ü
Check
the quorum of Board Meeting.
ü
Identify
the person to whom you will issue shares.
ü
Adopt
Valuation report of registered valuer for shares.
ü
Adopt
valuation report for valuation of consideration.
ü
Enter
into contract pursuant to which the securities allotted.
ü
Prepare
offer-cum-application.
ü
Pass
Board Resolution for approval of offer-cum-application.
ü
Issue Notice of General Meeting. (As per
Section- 101(1) issue notice of General Meeting at least 21 days before General
meeting).
ü
Notice
shall specify place, date, day and the hour of the meeting and shall contain a
statement on the business to be transact in the such meeting. [Section-101(2)]
ü
Authorize
a director of company to issue notice of General Meeting.
File Form with Registrar:
Attachments:
ü Certified True copy of Board
Resolution.
Information required to be mention – Explanatory Statement
(d) The company shall make the following disclosures in the explanatory
statement to be annexed to the notice of the general meeting pursuant to section
102 of the Act:
(i) the objects of the issue;
(ii) the total number of
shares or other securities to be issued;
(iii) the price or price band
at/within which the allotment is proposed;
(iv) basis on which the price
has been arrived at along with report of the registered valuer;
(v) relevant date with reference
to which the price has been arrived at;
(vi) the class or classes of
persons to whom the allotment is proposed to be made;
(vii) intention of promoters,
directors or key managerial personnel to subscribe to the offer;
(viii) the proposed time within
which the allotment shall be completed;
(ix) the names of the
proposed allottees and the percentage of post preferential offer capital that
may be held by them;
(x) the change in control, if
any, in the company that would occur consequent to the preferential offer;
(xi) the number of persons to
whom allotment on preferential basis have already been made during the year, in
terms of number of securities as well as price;
(xii) the justification for
the allotment proposed to be made for consideration other than cash together
with valuation report of the registered valuer.
(xiii) The pre issue and post
issue shareholding pattern of the company
STEP-1II
Hold Extra Ordinary general Meeting:
ü Check the quorum of
Meeting.(Section-103).
ü Present Offer Letter before
the members of the meeting.
ü Pass Special Resolution
for allotment of Shares other than cash consideration.
STEP-IV
File Form with
Registrar:
ü File MGT-14 with
Registrar within 30 days of passing of Special Resolution.
Attachments:
ü Notice of General
Meeting along with Explanatory Statement.
ü Certified True copy of
Special Resolution.
ü
Minutes
of General Meeting
Call Board Meeting after
receiving of consideration.
ü Issue Notice of Board
Meeting to all the directors of company at least 7 days before the date of
Board Meeting. [Section-173(3)]
ü Attach Agenda of Board Meeting along with
Notice.
STEP-VI
Hold the Board Meeting:
ü Check the quorum of
Board Meeting.
ü
Present
List of Allottes before the Meeting.
ü
Pass
Board Resolution for allotment of shares (within 60 days of receiving of consideration).
ü
Pass
Resolution for issue of Share Certificate in same Meeting.
ü
Authorize
to two directors and a authorize person to sign share certificate.
STEP- VII
File form with ROC:
ü
File
PAS-3 with Registrar of Company within 15 days of passing of Board resolution
for allotment of shares.
ATTACHMENTS:
Ø List of Allottes. (make
sure list of allottees signed by the signatory of PAS-3)
Ø Board Resolution for
allotment of Shares.
Ø copy of the contract,
duly stamped, pursuant to which the securities have been allotted together with
any contract of sale if relating to a property or an asset, or a contract for
services or other consideration
Ø A report of a registered
valuer in respect of valuation of the consideration shall also be attached
along with the contract
Ø A report of a registered
valuer for price of shares.
STEP-VIII
Issue Share Certificate:
ü Issue Share Certificate
in Form- SH-1 (As per Section-56 with in 2 (two) months from the date of
allotment of shares.
Checklist – Issue of
Shares other than cash consideration:
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S. No.
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Particular
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1
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Whether Company
has passed resolution in Board Meeting?
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2
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Whether Company
has passed special resolution in General Meeting?
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3
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Whether Company
has filed e-form MGT-14 for SR within 30 days of General Meeting
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4
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Whether Company
has obtained valuation report from registered valuer for the same?
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5
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Whether Company
having power in Article of association for the same?
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6
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whether
explanatory statement covered the following points:
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6.01
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(i) the objects
of the issue;
|
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6.02
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(ii) the total
number of shares or other securities to be issued;
|
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6.03
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(iii) the price
or price band at/within which the allotment is proposed;
|
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6.04
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(iv) basis on
which the price has been arrived at along with report of the registered
valuer;
|
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6.05
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(v) relevant date
with reference to which the price has been arrived at;
|
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6.06
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(vi) the class or
classes of persons to whom the allotment is proposed to be made;
|
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6.07
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(vii) intention
of promoters, directors or key managerial personnel to subscribe to the
offer;
|
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6.08
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(viii) the
proposed time within which the allotment shall be completed;
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6.09
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(ix) the names of
the proposed allottees and the percentage of post preferential offer capital
that may be held by them;
|
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6.1
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(x) the change in
control, if any, in the company that would occur consequent to the
preferential offer;
|
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6.11
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(xi) the number
of persons to whom allotment on preferential basis have already been made
during the year, in terms of number of securities as well as price;
|
|
6.12
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(xii) the
justification for the allotment proposed to be made for consideration other
than cash together with valuation report of the registered valuer
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6.13
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(xiii) The pre
issue and post issue shareholding pattern of the company in the following
format-
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7
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Whether allotment
made within 12 month from the date of passing of SR.
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8
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Whether company
hold Board meeting for allotment of shares?
|
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9
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Whether company
filed e-form PAS-3 with in 15 days of allotment
|
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10
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Whether following
documents attached with PAS-3
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10.1
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list of allottees
stating their names, address, occupation, if any, and number of securities
allotted to each of the allottees
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10.2
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a copy of the
contract, duly stamped, pursuant to which the securities have been allotted
together with any contract of sale if relating to a property or an asset, or
a contract for services or other consideration.
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10.3
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A report of a
registered valuer in respect of valuation of consideration.
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11
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Whether list of
allottees signed by the signatory of PAS-3?
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12
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Whether Company
mentioned proper post allotment shareholding pattern in PAS-3?
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13
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Whether proof of service
of offer letter available with Company?
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(Author – CS Divesh Goyal, GOYAL DIVESH &
ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com).
Disclaimer: The
entire contents of this document have been prepared on the basis of relevant
provisions and as per the information existing at the time of the preparation.
Although care has been taken to ensure the accuracy, completeness and
reliability of the information provided, I assume no responsibility therefore.
Users of this information are expected to refer to the relevant existing
provisions of applicable Laws. The user of the information agrees that the
information is not a professional advice and is subject to change without
notice. I assume no responsibility for the consequences of use of such
information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT,
SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION
WITH THE USE OF THE INFORMATION
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