- September 17, 2020
- Posted by: admin
- Category: Contract Law, Corporate Law, Funding trends, Shareholders
PROCEDURE FOR ISSUE OF SHARES TO THIRD PARTY IN CASE OF PRIVATE COMPANIES
| Sl. No. | Procedure | Corporate Filings |
| 1. | Check from the current capital structure of the company under the Memorandum of Association and Articles of Association of the Company to allow for issue of Shares.
If provided, the items as to alteration of capital in steps 2 and 3 will not be required. |
NA |
| 2. | Convene a Meeting of the Board of Directors for the following matters:
a. Approval of Share Subscription Agreement & Shareholders’ Agreement b. Approval of the Alteration of Share Capital of the Company c. Approval of the Alteration of Capital Clause in the Memorandum of Association of the Company d. Approval of the issue of Shares e. Approval of the Draft Notice convening the Extraordinary General Meeting of the company |
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| 3. | Convene an Extraordinary General Meeting(EGM) of the Members of the Company for the following matters:
a. Approval of the Alteration of Share Capital of the Company by way of ordinary resolution b. Approval of the Alteration of Capital Clause in the Memorandum of Association of the Company by way of ordinary resolution c. Approval of the issue of Shares by way of special resolution
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a. MGT-14 to be filed for Issue of Shares within 30 days from date of EGM
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| 4. | Proceed with the Issue of Shares by Circulation of Letter of Offer in Form PAS-4 along with Record of Offer in Form PAS-5 | a. Offer Letter in PAS 4 is required to be circulated only after filing of MGT-14, in step 3. |
| 5. | Convene a Board Meeting for the following matters:
a. Approval of Allotment of Shares b. Alteration of Articles of Association, in accordance with the Shareholders Agreement c. Approval of the Draft Notice convening the Extraordinary General Meeting of the company |
a. File E-form PAS-3 (Return of Allotment) within 30 days from the Date of Allotment of Shares |
| 6. | Convene an Extraordinary General Meeting(EGM) of the Members of the Company for the following matters:
a. Approval of the Alteration of Articles of Association of the Company, in case the investment requires the alteration of the terms in acccordance with the Shareholders Agreement. |
a. MGT-14 to be filed for alteration of the Articles of Association within 30 days from date of EGM
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| 7. | Pass the Board Resolution for issue of Share Certificate in Board Meeting. | a. Share Certificates are to be in Form SH-1
b. Stamp Duty to be paid in accordance with the relevant State Law. |