Any Company facing the shortfall of the fund in the company can convert their unsecured loan in the Capital of the Company with the permission of shareholder in the Meeting
A proper Board meeting should be held as per the section 173 of the Companies Act, 2013, a board resolution regarding the taking of loan and conversion of option attached to it should be proposed by the Board of Directors. After approval of the same, that shall be forward to the General Meeting for the approval of the members of the Company.
After the approval from the Board of Directors of the Company, approval from the members of the Company required in the General Meeting.
Note: at the time of actual conversion of unsecured loan into capital valuation report from the registered valuer is required if the allotment is done through preferential allotment
After approval from the members of the Company Special resolution has to be filled with the Registrar of Companies within 30 days of the passing of the Resolution.
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