A company may, pass a resolution in general meeting and subject to such rules in consultation with the Reserve Bank of India, accept deposits from its members on such terms and conditions, including the provision of security for the repayment of such deposits with interest, as may be agreed upon between the company and...
Continue readingPRIVATE PLACEMENT OF SHARES
Private placement means an offer or invitation to subscribe or issue of securities to a selected group of persons by a company other than by way of the public offer, through private placement offer-cum-application. Private Placement Offer cum Application A company may make a private placement of securities. A company shall issue private placement...
Continue readingBONUS SHARES
When a company is prosperous and accumulates large distributable profits, it converts these accumulated profits into capital and divides the capital among the existing members in proportion to their entitlements. Members do not have to pay any amount for such shares. A company may, if its Articles provide, capitalize its profits by issuing fully-paid...
Continue readingProcedure to issue and redemption of Preference Shares
(1) To issue preference shares the Article of Association (AOA) of the company should authorize it, if not then the amendment must be made in the Article of Association (AOA) of the company. The company must ensure that there is no default in the redemption of preference shares earlier or payment of dividend to...
Continue readingBUY-BACK OF SHARES
A buy-back of shares means a purchase of by a company of its shares or securities. A company may buy-back for a variety of reasons, e.g., excess floating stock in the market, the poor performance of the share, utilization of excess cash with the company, etc. Several times a company has excess cash on...
Continue readingAppointment of a director other than a retiring director at the Annual General Meeting (AGM)
Procedure to be followed by a public company: The candidate for directorship or any member proposing another person for appointment to the office of the director is required to give a notice in writing not less than 14 days before the meeting, signifying candidature for the office of director or intention to propose another...
Continue readingProcedure for Appointment of Directors to be elected by Small Shareholders
A listed company may have one director elected by small shareholders. Small shareholders mean a shareholder holding shares of the nominal value of not more than Rs. 20,000s or such other sum prescribed. 1. A listed company having a paid-up capital of five crore rupees or more and having one thousand or more small...
Continue readingRights Issue of Shares
Meaning of Right Issue of Shares: ‘Right Issue’ refers to the act of giving shares to the existing shareholder or members of the company in proportion to their current shareholding via a letter of offer. Section under its covers: SECTION 62 of Companies Act 2013 The Provisions of Section 62 of Companies Act, 2013...
Continue readingThe Negotiable Instruments
IT is a written order to pay a fixed sum of money on demand or at a certain time. A negotiable instrument can be easily transferred from one person to another. Once the instrument is transferred, the holder gets a full legal title to the instrument. Features of Negotiable Instruments: A written instrument with...
Continue readingEmployee Stock Option Plan (ESOP)
Employees stock option means the option given to the directors, officers, or employees of a company which gives such directors, officers or employees, the benefit or right to purchase, subscribe to the shares of the company at a future date at a predetermined price. A company may issue shares to its employees under employees’...
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