Preferred stock, sometimes referred to as preference shares, are a special kind of equity that allows owners to receive dividends declared by the Company ahead of equity owners. Preference shares provide the shareholders with the special right to claim dividends during the Company lifetime and with the option to claim repayment of capital, in case of the winding up of the company.
CHECKLIST
| Form | Particulars |
| Check Authority in the AOA. | |
| Check whether there is sufficient Authorized Share Capital. | |
| Procurement of Valuation Report for price determination and its justification (Relevant date for valuation shall be atleast 30 days prior to the date on which the general meeting of the company is scheduled to be held). | |
| Prepare a letter of offer in Form PAS-4 along with an application form serially numbered, specifically addressed to the offeree as per provisions of Rule 14. | |
| Prepare Form PAS-5 for record of private placement offers. | |
| Conduct a board meeting and pass the board resolution for approval of Form PAS-5, draft PAS-4, issue securities, and approve the notice of EGM. | |
| Conduct the EGM and pass the Special resolution for approval of the letter of offer in Form PAS-4 along with an explanatory statement as per provisions of Rule 14 | |
| Form – MGT-14 | e-Form MGT-14 (web-based form) for filing the special resolution (Board resolution in case of NCDs) with Registrar along with (a) Special resolution/Board Resolution (b) Explanatory statement with price justification (c) Consent to shorter notice (if applicable) |
| Open a separate bank account for keeping for receiving the application money. | |
| Issuance of Letter of offer in Form PAS-4 within thirty days of recording the name of such person. | |
| Issuance of Letter of offer in Form PAS-4 within thirty days of recording the name of such person | |
| Conduct a board meeting and pass Board resolution for allotment within 60 days of receipt of application money | |
| Form – PAS-3 | e-Form PAS-3 (web-based form) for return of allotment within 15 days of allotment alongwith: (a) List of allottees including all the information as per Rule 14(6) of companies (Prospectus and Allotment of Securities) Rules, 2014 (w.e.f. 23″ January, 2023 this list is required to be attached in the excel format in the web-based Form) (b) Valuation Report from the valuer, if any (c) Copy of contract where securities have been allotted for consideration other than cash or attachment wherein the details of contract reduced in writing by the company, if any |
| Issue of share certificates as per section 46 & 56 |
REQUIRED OF DOCUMENTS.
- Altered AOA if applicable.
- Valuation Report, name and address of valuer who performed valuation
- PAS-4 and PAS-5
- Particulars of offer including the date of passing of board resolution.
- Kind of the securities and the price at which the security is being offered.
- basis or justification for the price (including premium, if any) at which the offer or invitation is being made;
- amount which the company intends to raise by way of such securities
- material terms of raising such securities, proposed time schedule, purposes or objects of offer, contribution being made by the promoters or directors either as part of the offer or separately in furtherance of objects; principle terms of assets charged as securities:
- Copy each Resolutions pass during the meeting.
- List of allottees (Full Name, address, pan no., and Mail id)
- bank details with whom a separate bank account will be opened for the receiving the application money.