EGM
An EGM of the Company need not be held at the Registered Office of the Company or within the city, town or village where the Registered office of the Company is situated.
An EGM of the Company can be held at any place. However, in my opinion, an EGM is a meeting of the members of the company and should be held at such place and time which is convenient to the members of the company. Before fixing the time and venue of the GM of the company and specially before deciding to hold the EGM of the company in a Foreign county,consent of the members should be obtained and if so agreed by all the members or majority of them, then the EGM of the Company may be held at any place so agreed to by the members inlcuding a foreign country.
Time, day and place of Extraordinary General Meeting
Unlike an annual general meeting, an extraordinary general meeting may be held at any time, on any day and at any place. Thus , extraordinary general meeting may be called even for a time beyond business hours ,on a public holiday and at a place other than the registered office of the company ,even outside the state in which the registered office of the company is situated or out side INDIA ( Please refer to Company law book by K.M.Ghosh & Dr. K .R. Chandratre’s page no.2511 para 1.4)
The provisions with regard to time, day and place of holding the meeting specified in Section 166(2) applies to AGM only.
Hence companies are free to hold EGM at any time, day and place.
Friday, September 30, 2011
Wednesday, September 28, 2011
esops to foreign nationals
1. No RBI approval for ESOS to overseas employee as per below provisions.
As per R. 8 of FEM (Transfer or Issue of Securities by a person resident out side India), Regulation 2000, An Indian
Company may issue shares under ESOS, to its employees or employees of its joint venture or wholly owned subsidiary
abroad who are resident outside India, directly or though a trust. Provided that the scheme has been drawn in terms of
regulations issued under SEBI Act, 1992 and face value of the shares to be allotted under ESOS to the non-resident
employees does not exceed 5% of the paid up capital of the issuing company.
2. As Reg. 8(3) of above, RBI reporting is must within 30 days of issue of shares.
3. Foreign national can open demat account, bank account and trading accounts as RBI KYC Norms. up to best of my
knowlege no RBI Approval is required.
4. Foreign employee can sale ESOS shares through stock exchagne/registered brocker at ruling market price.
5. As per R. 11(2) of the Regulation, an authorized dealer may allow the remittance of sale proceeds of a security (Net of
applicable taxes) to the seller of shares resident outside India.
As per R. 8 of FEM (Transfer or Issue of Securities by a person resident out side India), Regulation 2000, An Indian
Company may issue shares under ESOS, to its employees or employees of its joint venture or wholly owned subsidiary
abroad who are resident outside India, directly or though a trust. Provided that the scheme has been drawn in terms of
regulations issued under SEBI Act, 1992 and face value of the shares to be allotted under ESOS to the non-resident
employees does not exceed 5% of the paid up capital of the issuing company.
2. As Reg. 8(3) of above, RBI reporting is must within 30 days of issue of shares.
3. Foreign national can open demat account, bank account and trading accounts as RBI KYC Norms. up to best of my
knowlege no RBI Approval is required.
4. Foreign employee can sale ESOS shares through stock exchagne/registered brocker at ruling market price.
5. As per R. 11(2) of the Regulation, an authorized dealer may allow the remittance of sale proceeds of a security (Net of
applicable taxes) to the seller of shares resident outside India.
GENERAL PRINCIPLES REGARDING ALLOTMENT
GENERAL PRINCIPLES REGARDING ALLOTMENT
With regard to the allotment of shares, the following general principles should be observed in addition to the statutory provisions, discussed hereafter:
- The allotment should be made by proper authority, i.e. the Board Directors of the company, or a committee authorised to allot shares on behalf of the Board. Allotment made without proper authority will be invalid. Allotment of shares made by an irregularly constituted Board of directors shall be invalid [Changa Mal v. Provisional Bank (1914) ILR 36 All 412].
It is necessary that the Board should be duly constituted and should pass a valid resolution of allotment at a valid meeting [Homes District Consolidated Gold Mines Re (1888) 39 Ch D 546 (CA)]. But Section 290 and the Rule in Royal British Bank v. Turquand (1856) 6 E & B 327 : (1843-60) All ER Rep 435 may make an allotment valid even if some defect was there in the appointment of directors but which was subsequently discovered. An allotment by a Board irregularly constituted may be subsequently ratified by a regular Board [Portugese Consolidated Copper Mines, (1889) 42 Ch. D 160 (CA)]. A director who has joined in an allotment to himself will be estopped from alleging the invalidity of the allotment [Yark Tramways Co. v. Willows, (1882) 8 QBD 685 (CA)].
- Allotment of shares must be made within a reasonable time (As per Section 6 of the Indian Contract Act, 1872, an offer must be accepted within a reasonable time). What is reasonable time is a question of fact in each case. An applicant may refuse to take shares if the allotment is made after a long time.
The interval of about 6 months between application and allotment was held unreasonable [Ramsgate Victoria Hotel Company v. Montefione (1866) LR 1 EX 109].
- The allotment should be absolute and unconditional. Shares must be alloted on same terms on which they were applied for and as they are stated in the application for shares. Allotment of shares subject to certain conditions is also not be valid one. For example where an applicant applied for shares on the condition that he will be appointed as branch manager of company but later on the condition was breached, it was held that he is not bound by the allotment of shares [Ramanbhai v. Ghasi Ram (1918) BOM. LR 595].
Similarly, if the number of shares alloted are less than those applied for, it cannot be termed as absolute allotment.
- The allotment must be communicated. As mentioned earlier posting of letter of allotment or allotment advice will be taken as a valid communication even if the letter is lost in transit. In Household Fire And Carriage Accident Insurance Co. Ltd. Grant (1879) 4 E.D. 216, Grant applied for certain shares in a company, the company despatched letter of allotment to him which never reached him. It was held that he was liable for the balance amount due on the shares. The mere entry of a shareholder’s name in the company’s register is insufficient to establish that an allotment was in fact made [Official Liquidator, Bellary Electric Supply Co. v. Kanni Ram Ramwoothmal (1933) 3 Com Cases 45; AIR 1933 Med 320]. There can be no proper allotment of shares unless the applicant has been informed of the allotment [British and American Steam Navigation Co. Re. (1870) LR 10 Eq 659]. A formal allotment is not necessary. It is enough if the applicant is made aware of the allotment. [Universal Banking Corpn. Re. Gunn’s Case (1867) 3 Ch App 40].
- Allotment against application only — No valid allotment can be made on an oral request. Section 41 requires that a person should agree in writing to become a member.
- Allotment should not be in contravention of any other law — If shares are allotted on an application of a minor, the allotment will be void.
Wednesday, September 21, 2011
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