Template Description

This Special Resolution template for the issue of equity shares on a private placement basis includes both the resolution to be passed at an Extraordinary General Meeting (EGM) and an explanatory statement outlining the details of the proposed issuance. It is a 7-page MS Word document designed for companies planning to raise funds through the issuance of new equity shares. This document is mandatory for companies adhering to Section 42 of the Companies Act, 2013, and the Companies (Prospectus and Allotment of Securities) Rules, 2014. Intended user include company directors, legal professionals, and corporate secretaries.

Understanding the EGM Special Resolution along with Explanatory Statement - Issuance of Equity Shares on Private Placement basis

Terminologies:

‘Special Resolution’ is a resolution passed by a majority of not less than three-fourths of the members present and voting at a general meeting, as per the provisions of the Companies Act, 2013.

‘Private Placement’ refers to the issuance of shares to a select group of investors rather than through a public offering.

‘Equity Shares’ are shares that represent ownership in a company and entitle the holder to dividends and voting rights.

Resolution Procedure:

Call an Extraordinary General Meeting (EGM):

Schedule and convene an EGM at the company’s registered office.

Ensure the meeting is conducted in accordance with statutory requirements.

Pass the Special Resolution:

Approve the creation, issuance, and allotment of equity shares on a private placement basis.

Authorize the use of funds raised and the execution of necessary documentation, including the Private Placement Offer Letter and Record of Private Placement.

Authorize Company Officials:

Designate directors to sign and issue the private placement documents.

Authorize filing of necessary forms and compliance with regulatory requirements.

Explanatory Statement:

Purpose of the Issue:

Describe the reason for issuing equity shares and how the funds will be utilized.

Detail the type of shares, pricing, and any premium involved.

Details of the Issue:

Provide the number of shares to be issued, their face value, and the aggregate amount to be raised.

List the subscribers, shareholding pattern pre- and post-issue, and any expected changes in control.

Pricing and Valuation:

State the pricing of the shares and basis for determining the issue price, including the valuation report.

Compliance and Regulations:

Ensure all statutory requirements, including disclosures and approvals, are detailed.

Conclusion

The Special Resolution for the Issue of Equity Shares on a Private Placement Basis template facilitates the legal and procedural requirements for raising funds through equity issuance. The resolution ensures formal approval from the company’s members, while the explanatory statement provides a detailed account of the issuance, ensuring transparency and compliance with statutory obligations. This template helps streamline the process of fund-raising, ensuring all legal requirements are met and supporting effective corporate governance.