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Suyog S Kabra
INDICATIVE LIST OF DOCUMENTS TO BE CHECKED
- Articles of association
- Financial Statement
- Notice along with Explanatory Statement
- Minutes of General meeting
- Register of members
Checklist For Issue And Redemption Of Preference Shares under Companies Act, 2013
Sr. No. | Particulars |
1 | A company is authorized by its articles to issue preference shares. |
2 | The preference shares shall be liable to be redeemed within a period not exceeding twenty years. A company engaged in the setting up and dealing with or infrastructure projects may issue preference shares for a period not exceeding thirty years, subject to the redemption of a minimum of ten percent of such preference shares per year from twenty first year onwards or earlier, on proportionate basis, at the option of the preference shareholders. |
3 | The issue of preference shares has been authorized by passing a special resolution in general meeting of the company |
4 | The explanatory statement to be annexed in notice of general meeting shall provide complete material facts concerned with and relevant to issue of preference shares including details mentioned in sub rule (3) of rule 9 of companies (Share Capital and Debentures) Rules 2014 |
5 | The company, at the time of such issue of preference shares has no subsisting default in the redemption of preference shares issued either before or after the commencement of the Act or in payment of dividend due on any preference shares. |
6 | The resolution for issue of preference shares has set out the following matters :(a) Priority with respect to payment of dividend or repayment of capital vis-à-vis equity shares
(b) Participation in surplus dividend (c) Participation in surplus assets and profits, on winding up which may remain after the entire capital has been repaid (d) Payment of dividend on cumulative or non cumulative basis (e) Conversion of preference shares into equity (f) Voting rights (g) Redemption of preference shares |
7 | All the terms of issue of Preference Shares other than those prescribed, such as when the preference dividend shall be due etc are clearly defined |
(Suyog S Kabra is partner with White Collar Legal LLP and can be reached at [email protected])
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