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Section 62(1(C) of the Companies Act 2013 read
with Rule 13 of Companies (Share Capital and Debentures) Rules 2014 enables
issue of shares to persons other than the existing shareholders/employees as
specified in Section 62(1)(a) and Section 62(1)(b), provided if the same is approved
by special resolution and subject to the conditions stated in the said Rule 13.
with Rule 13 of Companies (Share Capital and Debentures) Rules 2014 enables
issue of shares to persons other than the existing shareholders/employees as
specified in Section 62(1)(a) and Section 62(1)(b), provided if the same is approved
by special resolution and subject to the conditions stated in the said Rule 13.
Procedure For Issue of Shares on Preferential Basis
1. Check whether the issue is authorize by
Articles. If not make necessary amendments to alter the articles of association,
through special resolution passed at the shareholders’ meeting.
Articles. If not make necessary amendments to alter the articles of association,
through special resolution passed at the shareholders’ meeting.
2. Convene a Board Meeting to approve the notice of
General Meeting and necessary special Resolution/s along with explanatory
statements as required.
General Meeting and necessary special Resolution/s along with explanatory
statements as required.
3. 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:
in the explanatory statement to be annexed to the notice of the general meeting
pursuant to section 102 of the Act:
· The objects of the issue;
· The total number of shares or other securities to be issued;
· The price or price band at/within which the allotment is proposed;
· Basis on which the price has been arrived at along with report of the
registered valuer;
registered valuer;
· Relevant date with reference to which the price has been arrived at;
· The class or classes of persons to whom the allotment is proposed to be
made;
made;
· Intention of promoters, directors or key managerial personnel to
subscribe to the offer;
subscribe to the offer;
· The proposed time within which the allotment shall be completed;
· The names of the proposed allottees and the percentage of post
preferential offer capital that may be held by them;
preferential offer capital that may be held by them;
· The change in control, if any, in the company that would occur
consequent to the preferential offer;
consequent to the preferential offer;
· 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;
already been made during the year, in terms of number of securities as well as
price;
· The justification for the allotment proposed to be made for
consideration other than cash together with valuation report of the registered
valuer.
consideration other than cash together with valuation report of the registered
valuer.
· The pre issue and post issue shareholding pattern of the company in the
prescribed format-
prescribed format-
4.
Convene General Meeting and pass necessary
Special Resolution/s.
Convene General Meeting and pass necessary
Special Resolution/s.
5. Ensure to file Form MGT-14 with Registrar of
Companies within 30 days of passing the Resolution.
Companies within 30 days of passing the Resolution.
6. The securities allotted by way of preferential
offer shall be made fully paid up at the time of their allotment.
offer shall be made fully paid up at the time of their allotment.
7. the allotment of securities on a preferential
basis made pursuant to the special resolution passed pursuant to sub-rule
(2)(b) shall be completed within a period of 12 months from the date of passing
of the special resolution. If the allotment of securities is not completed
within 12 months from the date of passing of the special resolution, another
special resolution shall be passed for the company to complete such allotment
thereafter.
basis made pursuant to the special resolution passed pursuant to sub-rule
(2)(b) shall be completed within a period of 12 months from the date of passing
of the special resolution. If the allotment of securities is not completed
within 12 months from the date of passing of the special resolution, another
special resolution shall be passed for the company to complete such allotment
thereafter.
8. the price of the shares or other securities to
be issued on a preferential basis, either for cash or for consideration other
than cash, shall be determined on the basis of valuation report of a registered
valuer; and when convertible securities are offered on a preferential basis
with an option to apply for and get equity shares allotted, the price of the
resultant shares shall be determined beforehand on the basis of a valuation
report of a registered valuer and also complied with the provisions of section
62 of the Act;
be issued on a preferential basis, either for cash or for consideration other
than cash, shall be determined on the basis of valuation report of a registered
valuer; and when convertible securities are offered on a preferential basis
with an option to apply for and get equity shares allotted, the price of the
resultant shares shall be determined beforehand on the basis of a valuation
report of a registered valuer and also complied with the provisions of section
62 of the Act;
9. Where shares or other securities are to be
allotted for consideration other than cash, the valuation of such consideration
shall be done by a registered valuer who shall submit a valuation report to the
company giving justification for the valuation;
allotted for consideration other than cash, the valuation of such consideration
shall be done by a registered valuer who shall submit a valuation report to the
company giving justification for the valuation;
10.
Where the preferential offer of shares is made
for a non-cash consideration, such non-cash consideration shall be treated in
the following manner in the books of account of the company-
Where the preferential offer of shares is made
for a non-cash consideration, such non-cash consideration shall be treated in
the following manner in the books of account of the company-
o Where the non-cash consideration
takes the form of a depreciable or amortizable asset, it shall be carried to
the balance sheet of the company in accordance with the accounting standards;
or
takes the form of a depreciable or amortizable asset, it shall be carried to
the balance sheet of the company in accordance with the accounting standards;
or
o Where clause (i) is not
applicable, it shall be expensed as provided in the accounting standards.
applicable, it shall be expensed as provided in the accounting standards.
11.
Once the allotment is made, the company shall
within 30 days of allotment, file with the Registrar a return of allotment in Form PAS.3, along with the fee as
specified in Companies (Registration of Offices and Fees) Rules, 2014.
Once the allotment is made, the company shall
within 30 days of allotment, file with the Registrar a return of allotment in Form PAS.3, along with the fee as
specified in Companies (Registration of Offices and Fees) Rules, 2014.
12.
Deliver the share certificates of allotted
shares within a period of 2 months from the date of allotment.
Deliver the share certificates of allotted
shares within a period of 2 months from the date of allotment.
13.
Intimate the details of allotment of shares to
the Depository immediately on allotment of such shares
Intimate the details of allotment of shares to
the Depository immediately on allotment of such shares
14.
In case of listed companies, the
conditions/procedures prescribed under Chapter VII of SEBI (ICDR) Regulations
are to be complied with.
In case of listed companies, the
conditions/procedures prescribed under Chapter VII of SEBI (ICDR) Regulations
are to be complied with.
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