Company Law : Preferential Allotment and Private Placement are two distinct mechanisms through which companies can issue securities to select gr...
Corporate Law : This article deals with issues faced by a company when it comes to securities and allotment of shares. Here, the term securities r...
Company Law : There are various ways through which a company can raise capital i.e. issue of equity, preference shares, issue of debentures, bon...
SEBI : IMPORTANT DEFINITIONS: 1. Issuer: means a company or a body corporate authorized to issue specified securities under the relevan...
Income Tax : Provisions relating to tax on distributed income of domestic company for buy-back of shares Tax on distributed income to sharehold...
SEBI : Reservation to Holders of Convertible Debt Securities in Rights/Bonus Issues -On the issue of reservation to convertible debt hold...
SEBI : Norms for preferential allotment of equity warrants are learnt to be back under the regulatory scanner, following complaints from ...
Company Law : In exercise of the powers conferred by sub Section (1-A) of Section 81 of the Companies Act 1956 read with Section 642 of the said...
SEBI : The above details shall be given for a period of five years prior to date of filing of draft offer document and ought to be update...
Preferential Allotment and Private Placement are two distinct mechanisms through which companies can issue securities to select groups of investors. While both serve similar purposes, they have key differences as defined under the provisions of the Companies Act, 2013.
This article deals with issues faced by a company when it comes to securities and allotment of shares. Here, the term securities refers to any fungible, negotiable financial instrument with monetary value
There are various ways through which a company can raise capital i.e. issue of equity, preference shares, issue of debentures, bonds, deposits etc. If the shareholders are not willing to dilute their stake then they may go for issue of debentures, bonds, accepting deposits etc. Another way is issue of shares (equity or preference) by […]
IMPORTANT DEFINITIONS: 1. Issuer: means a company or a body corporate authorized to issue specified securities under the relevant laws and whose specified securities are being issued and/or offered for sale in accordance with these regulations. 2. Specified Securities: means equity shares, fully convertible debentures, partly convertible debentures or any other securities, which would be […]
Provisions relating to tax on distributed income of domestic company for buy-back of shares Tax on distributed income to shareholders [section 115QA) In addition to the income-tax chargeable in respect of the total income of a domestic company for any assessment year, any amount of distributed income by the company on buy-back of shares (not […]
Reservation to Holders of Convertible Debt Securities in Rights/Bonus Issues -On the issue of reservation to convertible debt holders in rights/bonus issues, it has been decided to clarify that reservation shall be available only to compulsorily convertible debt holders, since conversion in such cases is not at the option of the holders of these instruments.
Under Section 81 (1A) of the Companies Act, a public company may make a preferential allotment of shares only by passing a special resolution in a general meeting. On 24 May 2011 the Ministry of Corporate Affairs has issued a new set of draft rules [Unlisted Public Companies (Preferential Allotment) Rules, 2011] to replace the Unlisted Public Companies (Preferential Allotment) Rules, 2003. The draft rules which provide for greater compliance and disclosure requirements are open for public comments upto 20 June 2011.
In exercise of the powers conferred by sub Section (1-A) of Section 81 of the Companies Act 1956 read with Section 642 of the said Act, the Central Government hereby makes the following rules in supersession of unlisted Public companies (Preferential Allotment) Rules, 2003. 1. Short Title and Commencement -(i) These rules may be called Unlisted Public Companies (Preferential Allotment and Private Placement) Rules 2011 (ii) They shall come into force on the date of their publication on official Gazette.
The above details shall be given for a period of five years prior to date of filing of draft offer document and ought to be updated upto the date of filing of the red herring prospectus. In case of offer documents for fast track issues filed under Regulation 10, the period of five years shall be reckoned on the date of filing of prospectus with Registrar of Companies or letter of offer with the designated stock exchange.
Norms for preferential allotment of equity warrants are learnt to be back under the regulatory scanner, following complaints from institutional investors that this instrument is being misused by promoters.
