Download - Role of a secretary in capital formation
ROLE OF A SECRETARY IN CAPITAL FORMATIONMr. Atul Abhiman Agalawe(M. Com, B. Ed, D.B.M)
Shares Share means a smallest unit of the share
capital of company. Shares have specific values Types of Share Value
Face Value Issue Value Market Value Book Value Real Value
Issue Value of Shares At Par: Issue value equal to face value At Premium: Issue value more than face
value At Discount: Issue value less than face
value At Bid Price: by book building process The
upper /maximum/highest price is known as Cap/Bid Price. The lower /minimum/lowest price is known as floor/ask price.
Methods of Issue of shares Initial Public Offer Bonus Shares (Sec 63) Right Issue (Section 62) Employee Stock Option Scheme Private Placement (Section 42) Sweat Equity Shares (Section 54)
Issue of Shares Share issue is the
process by which companies pass on new shares to shareholders, who may themselves be new or existing shareholders.
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ISSUE OF SHARESProspectus
Application
Repayment/ dividend
Allotment
Detail of a Company & Shares in Prospectus. 90 % application is necessary If access application received then company issue shares by pro rata basis
full amount can be called up by company at the time of application or it can be paid up in installments also (calls)
share of the company may be issued in any of the following three ways:
1. At par;2. At premium; and3. At discount.
Preliminary WorksFinancial Planning
Drafting and Filing of Prospectus
Appointment of Banker
Appointment of Underwriter
Listing of shares with Stock Exchange
Issue of SharesIssue of Prospectus
Receiving Application
Sorting out Applications
Preparation of List
Possibilities for Subscription of shares
Under Subscription: Less Application Over Subscription: More Application
Allotment of Shares Allotment means the act of appropriation by
the board of directors of the company of a certain number of securities to persons who have made applications for securities.
Regular Allotment: follow the all provisions Irregular Allotment: not follow the provisions Effects of Irregular Allotment
Voidable for allotte Director Liability Fine
Conditions of Allotment Statutory Allotment
1. Registration of Prospectus
2. Application Money3. Depositing
Application Money4. Minimum Subscription5. Opening & Closing of
Subscription List6. Permission to Deal in
Stock Exchange7. Oversubscription
General Conditions1. Proper Authority 2. Allotment against
Application only3. Allotment not to be
in contravention of any other law
4. Reasonable Time5. Communication6. Absolute and
unconditional
Procedure for AllotmentPreparation of List
Appointment of Allotment
Committee
Decision about basis of
Allotment
Finalization of Allotment
Board Meeting
Nominee of SEBI
Sending Letters
Receiving Allotment
Money
Making Entries on Allotment
SheetFiling Return of Allotment
Preparation of Register of Members
Issuing Share Certificate
Share Certificate (Sec 46) It is a registered document
of title to the shares issued by the company under its common seal, duly stamped and signed by at least two directors and counter signed by secretary of the company.
It is a certificate issued to the members by the company under its common seal specifying the number of shares held by him and the amount paid on each share.
Statutory Provisions1. Time Limit 2. Default3. Sanction of the Board4. Content of Share
Certificate5. Seal and Signature6. Entry in Register of
Member7. Preservation8. Dispatch by
Registered Post9. Shares un De-mat
Procedure Printing of
Share Certificate
Filling the Details
Board Meeting
Public Notice and Circular
Letter
Dispatch of Share
Certificate
Share Warrant It is a bearer
document of title to the shares issued by the company under its common seal, duly stamped and signed by at least two directors of the company.
Statutory Provisions1. Only Public Ltd2. Against Fully Paid-up
Shares3. Provision in Articles4. Permission of Central
Government5. On the Request of
Shareholder6. Abolished by
Companies Act 2013
ProcedureWritten
ApplicationLodgement
Ticket
Compliance of Law
Board Resolution
Preparation of Share Warrant
Entries in Register of
Member
Letter to Applicant
Transfer of shares Transfer the
ownership of shares by selling or gift from one person to another.
Seller known as Transferor
Buyer known as Transferee
It is a voluntary action taken by shareholder
Provisions1. Instrument of
Transfer2. Transfer by Legal
Representative3. Application for
Transfer4. Power to Refuse
Transfer5. Share certificate
Procedure for Transfer of shares (Sec 56)
Submission of Instrument of
TransferVerification of Documents
Notice of Lodgement
Board Sanction
Registration of Transfer
Issue of Share Certificate
Transmission of Shares The passing of title of
shares by operation of law of inheritance upon happening of death, insolvency or lunacy of a shareholder to his legal representative.
It is a compulsory action by operation of Law.
Provisions Ownership of
shares Rights of legal
Representative Notification to
Company Powers of Board
Receive Request Letter
Scrutiny
Board Meeting
Entry in Register of Member and Issue of share certificate
Application
Procedure of Transfer
Entry in Register of Member and Issue Share Certificate
Become as a Member Incase of Transfer
Forfeiture of shares: When a Company terminates/cancels membership of the shareholder by compulsion due to non-payment of call money, it is known as forfeiture of shares. Regulations 28 to 34 of Table F
Surrender of shares: If any shareholder returns shares to the company for avoiding the long procedure of forfeiture is known as Surrender of shares. It is a voluntary action taken by shareholder. No regulations in the Companies Act 2013 and Table F.