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.