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CS Professional · Strategic Management and Corporate Finance · Raising of Funds from Equity and Procedural Aspects - Public Funding

Under Section 62(1)(c), Nila Pharma Ltd wants to allot shares to a group of persons who are not existing shareholders, for cash. Which requirement applies?

Shares can be offered to any persons, whether or not existing shareholders, if authorised by a special resolution and if the price is determined by the valuation report of a registered valuer, subject to applicable provisions of Chapter III and prescribed conditions.

  1. AAuthorisation by a special resolution, and the share price determined by the valuation report of a registered valuerCorrect
  2. BAuthorisation by an ordinary resolution, with price fixed by the Board alone
  3. CPrior consent of all existing shareholders
  4. DApproval of the Central Government in every case

Explanation

Clause (c) permits offers to any persons if authorised by a special resolution, for cash or other consideration, where the price is determined by the valuation report of a registered valuer, subject to Chapter III compliance and prescribed conditions. An ordinary resolution and Board-fixed price do not satisfy it.

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