intends to issue shares at a discount, it has to pass a resolution authorizing the issue. An application should then be made to the Company Law Board for an order sanctioning the issue. The Company Law Board takes a decision on the application after due consideration of ail the circmnst mces of the case. and makes an order sanctioning the issue if it thinks proper to do so
However, the Company Law Board will not authorismgtheissue if the ma simmnrate of discoumt specified in the resolution exceeds 10 per rent, miles the Board is of the opinion that higher percentage of discormt may be allowed as a special case.
In every prospectus relating to the issue, the company must include parlicmarsofthedDscoon the i of the shares, or of so much of the dDscount which has been written off at the date of issue of the prospectus.
11 default is made m this respect the company and every erp officer in defaDh is liable to a fine up to Rs 50
SECRETARLALPROCEDUREIN CONNECTiON WITH ALLOTMENT
The steps to be taken by the secretary in commection with allotment of shares may be outhned as follows:
(i) He has to see that the statutory conditions for allotment under Sections 69 and 70 of the Companies Act are fulfilled before the Board of Directors proceed to allot shares. It must also ensure that the SEBI relating to opening and closing of subscription lists, or er-subscription, etc. are followed strictly
(ii) Where no prospectus has been issued, he has to see that a statement in lieu of prospectus is Sled with the Registrar and at least three days, have elapsed after such filing before the allotment is taken up.
Qii) Where a prospectus is issued, to see that application is made to one or more recognized stock exchange for listing of the shares before the prospectus IS issued and that fact is stated in the prospectus with the name(s) of the stock exchange(s) applied to. Also to see that a copy ofthe prospectus IS filed with the Registrar of Companies before it is issued.
(iv) He has to see that the applications for shares are checked, stored and entered in the Application and Allotment List.
(v) if the issue is over-subscribed, he also to see that a committee of directors is appointed by the Board to consider and report on the basis of allotinent to be adopted.
STATUTORY PROVISION
' (i) Unless the 'mmimqin subscription' as stated in the prospectus has been prescnb. d, no allotment shall be made.
(ii) The amolmt payable on application on each share shall not be less th m 5 per cent of the nominal amount of the share.
(iii): All moneys received on applications for shares must be kept - : deposited in a scheduled bank umt I the Certificate to Commerce Business is received or until the application moneys are refunded
(iv) if the aforesaid conditions are not satisfied within 120 days of the first issue of the prospectus, all moneys received on applications for share must be refi Dded forthwith without any interest. If any such money is not repaid within 130 days after the issue of the prospectus, the directors shall be liable to repay the moneys with interest at 6 per cent per amwml
(v) No allotment of my share shall be made before the expiry of a
: time limit laid down m the Act ID the case of a compamy which has issued a prospectus generally, no allotment can be made mmti1 the beginu ing of the fifth day after the prospectus is first issued and appears as am advertisement in the newspapela, or such late
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