6 th June, 2014 1 Slide 2 Kinds of Share Capital (sec. 43) 2
Slide 3 Voting Rights & Variation Of Rights (sec. 47) Equity
Share holders Right To Vote On Every Resolution 3 Resolutions which
Directly affects The Rights * Winding Up Of The Company *Repayment
/ Reduction Of Its Equity Or Preference Share Capital Preference
Shareholders Slide 4 Equity with differential rights (sec. 43) 4
Authorised by the AOA Ordinary resolution (for listed companies
through postal ballot)Shall not exceed 26% of the total post-issue
paid up equity share capital at any point of time Should have 3
years track record of distributable profits No default in payment
of declared dividend, repayment of matured deposits or redemption
of preference shares/debentures, if any including interest there on
No default in filing Financial Statement & Annual Return for
preceding 3 years Not be penalized by Court or Tribunal of any
offence under RBI, SEBI, SCRA,FEMA and any other special act where
such cos., are regulated, if any Conversion into share with
differential rights and vice versa is not allowed Slide 5 Continued
5 Structuring different economic rights for different class of
equity shareholders may become difficult given the conditions that
companies have to comply with under the Companies (Share Capital
and Debentures) Rules, 2014. However, it is important to note that
the rules issued under this chapter specifically mention that
existing equity shares issued with differential rights will
continue to have the rights provided at the time of their issuance
Slide 6 Kinds of Issues of share capital (sec. 62, 42, 63, 54, 23
etc.) 6 Slide 7 Rights Issues sec. 62(1)(a) 7 Slide 8 Rights Issues
-Procedure 8 Conduct a Board Meeting and pass resolution for right
issue and approve the letter to offer Issue of Letter of Offer
which shall specify the no. of shares offered. Time Limit is 15 to
30 days Offer to be accepted If not accepted with in time, deemed
to be declined Can be renounce within the time to any other person
Slide 9 Section 42. Part II Private Placement "private placement"
means any offer of securities or invitation to subscribe securities
to a select group of persons by a company (other than by way of
public offer) through issue of a private placement offer letter and
which satisfies the conditions specified in this section No
Invitation shall be made to such number of persons not exceeding 50
or such higher number as may be prescribed in a financial year
(i.e., 200) and on such conditions in the form and manner of
Private Placement as may be prescribed Excluding: QIBs Employees
Such concept was not there in the Companies Act, 1956. 9 Slide 10
Private Placement Rules No fresh offer of Private Placement is
allowed unless the previous offer, either have been completed or
withdrawn or abandoned If the Private Placement is turned to be a
public offer the provisions of SCRA and SEBI should be complied
with The allotments must be completed within 60 days, failing which
the amount should be refunded within 15 days form the date of
completion of 60 days. Otherwise it shall be liable to repay that
money with interest @ 12% per annum from the expiry of the 60 th
day The subscription money should be kept in a separate bank
account in a scheduled bank The company shall maintain a Register
and should keep all the offers received in such manner as may be
prescribed and complete information about such offer shall be filed
with the Registrar within a period of 30 days of circulation of
relevant private placement offer letter No advertiseme nt shall be
released 10 Slide 11 Max allotment to 200 number of Investors
(excl. QIBs & ESOP) in one FY Cash Payment prohibited Allotment
to be made within 60 days, else refund @ 12% interest p.a. Share
application money to be kept in Separate Account key points 11
Slide 12 Preferential Offer sec. 62 12 Special Resolution Comply
with Private Placement Rules Valuation of Shares Disclosures in
explanatory statementFully Paid Up Shares shall be allottedOffer
should be completed with in 12 months Slide 13 Employee Stock
Option Scheme sec. 62 13 Issued to Directors and Employees
including Subsidiary & Holding Co Passing by Special
ResolutionFreedom to fix price and lock in period Same definition,
but excludes - independent directors, promoter/PG, director
directly or indirectly holds > 10% of outstanding equity shares
and includes employee of associated company minimum one year gap
between grant of options and vesting of optionsAmount forfeited by
the company if the option is not exercised by the employees within
the exercise periodOptions not transferableOptions not be pledged,
hypothecated, mortgaged Slide 14 Employee Stock Option Scheme 14
Legal heirs or nominees are entitled in case of death of employee
Disclosure in the board's report In the event of resignation or
termination, options not yet vested will expire and options vested
can exercise as per the terms at the time of grant of options Same
definition, but excludes - independent directors, promoter/PG,
director directly or indirectly holds > 10% of outstanding
equity shares and includes employee of associated company listed
companies regulated by SEBI Slide 15 Bonus Issue sec. 63 15
Existing Members Out of Free Reserve, Security Premium, Capital
Redemption Reserve Authorized by Articles Recommended by Board and
Authorize in General Meeting No default in payment in interest or
principal amount in FDs or Debt Securities No default in payment of
Statutory dues of employees (PF, Bonus & Gratuity) Partly paid
shares shall be made fully paid up. Once issued should not be
withdrawn Slide 16 Sweat Equity Shares sec. 54 16 Issued to
Directors and Employees including Subsidiary & Holding Co. Can
be issued at discount or for consideration other than cash For
providing Technical Know How, Intellectual Property Rights or Value
addition Authorised by a special resolution one year should have
elapsed since the commencement of business listed companies are
regulated by SEBI Offer should be completed with in 12 months Shall
not issue more than 15% of Paid up Capital Shares shall be locked
in for 3 years Valuation of Equity Shares & Know How,
Intellectual Property shall be done by RV Slide 17 Comparative
analysis Companies Act, 1956 Companies Act, 2013
ParticularsPrivatePublic Rights Issue No provisions were
prescribed. Sec. 81 Preferentia l Allotment No provisions were
prescribed. Sec. 81(1A) ESOPsNo provisions were prescribed. Sweat
Equity Sec. 79A Bonus Issue No provisions were prescribed.
ParticularsPrivatePublic Rights IssueSec. 62(1)(a) Preferential
Allotment Sec. 62(1)(c) ESOPsSec. 62(1)(b) Sweat Equity Sec. 54
Bonus IssueSec.63 17 Slide 18 Issue of Preference Shares sec. 55 18
Irredeemable Preference Shares are not allowed to issue Maximum
redemption period shall not exceed 20 years & Infrastructure
projects 30 years Passing by Special Resolution Explanatory
statement to be annexed to the notice listed companies are
regulated by SEBI Slide 19 Redemption of Preference Share 19 Shall
be redeem out of Profit or Proceeds of fresh issue No such shares
redeemed unless fully paid up Slide 20 A company may issue
debentures with an option to convert such debentures into shares,
either wholly or partly at the time of redemption. Provided that
the issue of debentures with an option to convert such debentures
into shares, wholly or partly, shall be approved by a special
resolution passed at a general meeting. No company shall issue any
debentures carrying any voting rights. Where debentures are issued
by a company under this section, the company shall create a
debenture redemption reserve account out of the profits of the
company available for payment of dividend and the amount credited
to such account shall not be utilised by the company except for the
redemption of debentures. 20 Issue of Debentures sec. 71 read with
sec. 42 & 62 Slide 21 Deposits secs 73-76 read with (Acceptance
of Deposits Rules by Companies) 21 Deposit means Any receipt of
money by way of deposit or loan or in any other form, by a company.
Depositor meansAny member who has made deposit with the Company
Slide 22 What is not a Deposit Amount received from CG, SG or
guarantee provided by them Amount received from Foreign Govt.,
Banks, FI, ADB, IFC, etc., Amount received from any Banking Co. or
SBI or its Subsidiaries Amount received from Banks, Public
Financial Institutions, Insurance Co. etc., Amount raised through
Commercial Paper Amount raised from one Co. to other Co Amount
received from Subscription of Securities Amount received from
Director Amount raised by issue of secured bonds & debentures
or issue of CCDs convertible into shares within 5 years Amount
received from Employee under Contract Any non-interest bearing
amount held in trust Advance received for Supply of Goods Security
deposit for performance of contract Advance consideration received
for transfer of Property Loan bought in by Promoters as stipulated
by Banks and FI Amount accepted by Nidhi Co 22 Slide 23 From whom
to accept 23 Eligibility Criteria Public Co. in order to accept
from other than members (Eligible Co.) Net worth 100 Cr or more
Turnover 500 Cr or more Every other Co. only from Members Slide 24
Tenure of Deposit 24 Deposits shall be accepted Minimum for 6
months Maximum for 36 months If accepted for less than 6 months
Such deposits shall not be more than 10% of paid up capital + free
reserves Minimum 3 months shall elapse before repayment of deposits
Slide 25 Threshold limits 25 Threshold limits for accepting or
renewal of Deposits by various Co. Eligible Co. from members only,
then till 10% of Paid up Capital + free reserves from other than
members, then till 25% of Paid up Capital + free reserves Govt.
Eligible Co. till 35% of Paid up Capital + free reserves Other than
Eligible Co. from members only, then till 25% of Paid up Capital +
free reserves Slide 26 About existing Deposits File within a period
of 3 months from commencement of this act Form DPT 4 Shall repay
all the deposits within one year or on the date on which deposits
are becoming due whichever is earlier 26 Slide 27 Insurance In
default to repay and if amount is more than Rs. 20,000/-, the
Insurance Co. shall repay not less than Rs. 20,000/- for each
depositor Contract to be entered with insurance agency before 30
days of issuing Circular Its mandatory 27 Slide 28 Every new
beginning comes from some other beginnings end 28 Thank You Every
new beginning comes from some other beginnings end
