Conditions For Issue
1
Conditions For Issue There should be a provision regarding the issue of shares in MoA or AoA of the company.
2
Conditions For Issue
A special resolution is to be passed in the general meeting of the Board of Directors and a copy of minutes and special resolution is to be sent to the Registrar of the Companies in Form MGT 14 within 30 days of the meeting.
3
Conditions For Issue
The company has to maintain a register of Preference Shareholders of the company under Section 88 of Companies Act, 2013.
Issue of Shares The preference shares can be issued in three ways:
1
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Issue of Shares
Right issue of shares [Section- 62(1)(a)]
2
Issue of Shares
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Preferential allotment of shares. [Section- 62(3)(c) and Section-42]
3
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Issue of Shares
Private Placement of shares (Section-42)
Note: ● Allotment should be completed within 60 from the date of receiving application money. ● The issue should be under Form SH 1. ● Maintain the register of Preference Shareholders under Section 88.
Redemption of Preference Shares The preference shares can only be redeemed out of surplus profits or out the funds gained for the sole purpose of redemption. The funds required for redemption are sent to Capital Redemption Reserve (CRR) then used from there for the process of redemption.
Recommended Articles ❖ How to Issue Preference Shares? ❖ Transfer and Transmission of Securities Under Companies Trade Process ❖ Differences Between Equity Shares and Preference Shares ❖ Major Differences Between Shares and Debentures