Procedure for Conversion of Debentures into Equity

Procedure for Conversion of Debentures into Equity

( In accordance with Section 62 of Companies Act, 2013-Allotment of Shares on preferential basis)

Step1  :  Pass Board Resolution No issue of shares on a preferential basis can be made by a company unless authorized by its articles of association and unless a special resolution is passed by the members in a General Meeting authorizing the Board of Directors to issue the same.

Step 2:Pass Special Resolution of the members in Extra ordinary General meeting. Prepare Explanatory statement to the special resolution. Explanatory statement should contain the matters specified in section 62 ( Pls check page 28 to 30)

Step 3: File Special resolution with ROC in form MFT-14

Step 4:  Allot shares after getting valuation report from Registered valuer.  Allotment shall be completed within twelve months from the date of passing of the special resolution. Price of the shares shall be determined based on the valuation report of a registered valuer.

Step 5: Prepare and Issue Share Certificates as per Form SH-1 Step 6: A return of allotment of securities shall be filed with the Registrar within thirty days of allotment in Form PAS-3 and with the fee as provided in the Companies (Registration Offices and Fees) Rules, 2014 along with a complete list of all security holders. Attachments required for form PAS-3 (Return of Allotment ) 1.List of Allotees 2.Copy of Board resolution 3.Copy of Special Resolution 4.Valuation report