Allotment of Shares

What is Allotment of Shares Overview

However, Article of Association of the Company must not restrict the right to make such allotment and also the authorise capital of the company must have the limit to allot the required shares. The procedure for allotment of shares can be time-consuming with the need to meet compliance at every step. You can avail affordable plans offered by Provenience to complete the process with ease.

However, Article of Association of the Company must not restrict the right to make such allotment and also the authorise capital of the company must have the limit to allot the required shares. The procedure for allotment of shares can be time-consuming with the need to meet compliance at every step. You can avail affordable plans offered by Provenience to complete the process with ease.

Pursuant to the provisions of Section 42 & section 62 of the Companies Act, 2013, and the rules made thereunder, shares can be issued on the basis of Rights Issue, Private Placement & Preferential Allotment.

Under Right Issue,with the approval of the Board, shares are issued to the existing shareholders of the Company in the proportion of their current existing shareholding by issuing a Letter of Offer in this regard. The offer shall be open for a period not less than 15 days & not exceeding 30 days along with the right of renunciation. This offer period can be reduced in case of a Private Company with the consent of ninety percent, of the members of the Company. The offer letter shall be dispatched through registered post or speed post or through electronic mode or courier or any other mode having proof of delivery to all the existing shareholders at least three days before the opening of the issue.

Whereas, Preferential allotment refers to the allotment to any person being an existing shareholder or an outsider, either for cash or for a consideration other than cash. The price of such shares shall be determined by the Valuation Report. Rest of the practical procedure for the preferential allotment of shares is more or less similar to that of private placement.

Documents Required For Allotment of Shares

1. Article of Association of the Company must not restrict the right to make such allotment

2. Authorise capital of the Company must have the limit to allot the required shares

3. Name of the Allottee

4. Fathers Name of the Allottee

5. Full address with PIN

6. No of shares to be Allotted

7. PAN card copy of the person

8. Aadhar Card Copy of the person

Checklist /Minimum requirement for Allotment of Shares

1. Article of Association of the Company must not restrict the right to make such allotment

2. Authorise capital of the Company must have the limit to allot the required shares

3. Name of the Allottee

4. Fathers Name of the Allottee

5. Full address with PIN

6. No of shares to be Allotted

7. PAN card copy of the person

8. Aadhar Card Copy of the person

Arranging the Documents

Arrange and provide the required documents as per the checklist shared.

Holding of BM & GM to approve the issue of shares

Calling and holding of BM and also GM In case of Private placement or Preferential allotment, to approve the issue of the shares

Filing of Form MGT-14

Form MGT-14 is required to be filed with the ROC for the registration of resolution passed by the shareholders for the approval of issue of shares.

Convening of BM to allot shares

Convening BM for allotment of the shares to proposed allottees & filing Form PAS 3 as return of allotment with ROC

Process for Allotment of Shares

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