Can shares be issued against unsecured loans?
If any company accepted loan before 1st April 2014 (As per Companies Act, 1956) and wants to convert loan into Equity shares at present company then Company can’t convert such loan into shares according to section-62 of Companies Act, 2013 except if company passed the special resolution at the time of acceptance of …
How do I convert my loan into shares?
The procedure for conversion of unsecured loan into equity:
- Compliance at the time of taking a loan. Hold a Board Meeting for. …
- Compliance at the time of converting the loan to equity. Hold a Board Meeting and pass a resolution for allotment of shares by converting the loan to equity.
Can share application money be converted into loan?
Share application money cannot be treated as Loan unless Transaction is bogus.
Can unsecured loan be treated as quasi equity?
Characteristics of quasi-equity financing would include either being an unsecured loan, or being a flexible loan repayment schedule. Mezzanine debt and junior debt are examples of quasi-equity financing as they are both usually unsecured and flexible when it comes to the repayment schedule of the loan.
Can you convert debt to equity?
Debt-to-equity swaps are common transactions in the financial world. They enable a borrower to transform loans into shares of stock or equity. Most commonly, a financial institution such as an insurer or a bank will hold the new shares after the original debt is transformed into equity shares.
Can directors give loan to company?
Can a director give loan to the company? Ans: A director is permitted to give loan to the company. However, he has to give an undertaking that the loan given is out of his personal funds and not from the funds of the company. Director can give loan to the company and there is no prohibition for it.
What are rights in stock market?
A rights issue is an invitation to the existing shareholders to buy additional shares of the company at a discounted price within a specific time frame.
Can loan be converted into debentures?
Hold the General Meeting on fixed day and pass Special Resolution for issuing Debentures or taking Loan with an option to convert these debentures or loan into shares of the company in future. Prepare the minutes of General Meeting, get them signed and compile accordingly.
Which shares are converted into equity share?
Convertible preferred stocks are preferred shares that include an option for the holder to convert the shares into a fixed number of common shares after a predetermined date.
What is share application money?
Share application money is the amount received by a company from applicants who wish to purchase its shares. It is the money received in respect to an initial public offering of shares. This money can be more or less than the actual amount anticipated in respect to the number of shares floated.
Can share application money used pending allotment?
Share Application Money Pending Allotment means the amount received on the application on which allotment is not yet made (pending allotment). The process starts when any company publicly issues its equity shares to raise funds.