[Section 55 of the Companies Act, 2013 read with Rule 9 & 10 of the Companies (Share Capital and Debentures) Rules, 2014]
If the Company intends to issue Preference Shares, then the Company shall follow the following procedure;
| SR. NO. | COMPLIANCE ACTION |
|---|---|
| 1. |
Check whether authority to issue Preference Shares is there in the Articles of Association (AOA) or not, If not then amend the Articles of Association (AOA) accordingly; |
| 2. |
Board Resolution shall be passed for issue of Preference Shares; |
| 3. | The Company shall file e-form MGT-14 within 30 days of passing Board Resolution for issue of Preference Shares.
[It shall be noted that the filing of e-form MGT-14 is exempted for Private Companies] |
| 4. | The Company shall pass the Special Resolution for issue of preference Shares; |
| 5. | The Company shall file e-form MGT-14 within 30 days of passing Special Resolution along with the Special Resolution and Explanatory Statement; |
| 6. | Board Resolution shall be passed for allotment of Preference Shares; |
| 7. | The Company shall file e-form MGT-14 within 30 days of passing the Board Resolution for allotment of Preference Shares;
[It shall be noted that the filing of e-form MGT-14 is exempted for Private Companies] |
| 8. | ♦ The Company shall file e-form PAS-3 for Return of allotment within 30 days of allotment of Preference Shares along with the following attachments;
√ List of Allottees; √ Board Resolution for allotment of Preference Shares; √ Special Resolution along with the Explanatory Statement; √ Any other relevant documents as per the method by which the Preference shares are issued. ♦ It shall be noted that if the Preference Shares are issued through Private Placement/ Preferential Allotment then e-form PAS-3 shall be filed within 15 days of allotment of Shares; |
| 9. | Relevant entries shall be made in the Register of Members in Form MGT-1 within 7 days of allotment; |
| 10. | The Company shall issue the Share Certificates in accordance with the provisions of Section 46 and Section 56 of the Companies Act, 2013; |
| 11. |
It is important to note that the unlisted Public Company shall issue the Preference Shares in Demat form. |
