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Srinivas (manager)     21 March 2013

Pvt ltd compny issuing shares against loan form individual

Hi Please give some knowledge abiout the following issue

A realestate pvt ltd compny in need of money and they are asking custoimers to pay 8 laks rupees and they will give one flat after 3 years ( flat worth 20 lakhs)

as security for money , they are giving one MOU CUM SALE OF AGREMENT  and a share certificate for 80000 shares with face value 10 rs. at the time of regisytering the flat they will take back the shares.

1 weather issuing shres is legal ?

2 are this shares have any worth?

3 if they issue share  certificvates , company secretary need to sign the certificates or not?

4 are shares can return our principle or not?

if they do not give flat after 3 years ,, how we are secured for our money

 

 

 



 7 Replies

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 )     22 March 2013

As per the company act, a  pvt. ltd. co. cannot issue shares to general public. They cannot procure money from general public. Public co. only can issue shares as per their copany policy. A co. secretary must & should sign.For public co. also SEBI  guilde lines are required.

Srinivas (manager)     22 March 2013

Thanks mr rama chary,  i would like to know your address i mean which aplace . are you from hyderabad

DR.VEDULA GOPINATH (ADVOCATE AND CORPORAE ADVISOR)     22 March 2013

mr srinivas

 

Under certain circumstances subject to certain rules and compliances, private limited company can issue shares to any other person for consideration other than cash duly the transaction reduced to writing by way of a contract and subject to articles of association of the company.

 

DR VEDULA GOPINATH  ADVOCATE AND CORPORATE ADVISOR  vgopinath2@yahoo.com 09848227926 Hybad

sanjay kumar (BE/ LLM in Corporate Laws)     22 March 2013

Basically, the company is taking a Loan of Rs.8.00 Lakhs and as a collateral, issuing Shares of the same amount plus an MOU and Agreement of Sale, that the shares can be redeemed as a Flat three years later. The entire transaction needs detailed scrutiny of the documents including Articles of  Association and Memorendum of Association etc. Only after that  a firm opinion about the deal can be given.

Srinivas (manager)     22 March 2013

Hi mr  Sanjay kumar , your comment and fixing the whole issue in 2 sentences is great

further

1) company is not willing to show the article of association or memorondem of association.

2) on share certificate there is no secretary signature , still that share certificate will be valid

3) whole thing can lead to any type of scam and  will i loose money

R.V.RAO (retired)     14 February 2014

all cos need not appoint co.secretaries..any 2 directors can sign share cert..can the co. show RBI/govt. permission to raise / collect funds from public?

these are all procedural issues.the main issue is what is the guarantee after  the promised period you will get back  your flat /money?

if they arrange irrevocable bank guarantee for the amount of your deposit plus interest for 3 years ,then only u agree for the deal..

banks can never go back on the bank  guarantees, which they issue.Then only .u r safe.

Nubina (assistant company secretary)     15 February 2014

1) company is not willing to show the article of association or memorandum of association.

If you want to check MOA & AOA, you can download from MCA Site after paying 50 Rupees.

2) on share certificate there is no secretary signature , still that share certificate will be valid

Company Secretary is not mandatory to sign Share certificate.That is to be sign 2 directors and one authorised signatory.

3) whole thing can lead to any type of scam and  will i loose money.

You can check MCA site the share allotment has been properly filed with Registrar of Companies using Form 2. 

Nubina

8608232723


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