Declaration of dividend out of current profits - BR

Board Resolution for recommending payment of dividend on equity shares out of current profits

“RESOLVED THAT in accordance with the provisions of Section 123 and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Declaration and Payment of Dividend) Rules, 2014, the Board of directors of the company do hereby recommend a dividend at the rate of Rs _________ per equity share out of the current profits of the company for the year ended on ____________ 20__ on the ________ fully paid equity shares of the company absorbing Rs. _________ out of the profits of the year and that, subject to the declaration by the members of the company at the ensuing annual general meeting, such dividend be paid to the registered holders of the equity shares whose names would appear on the register of members on _______ 20__.”

Declaration of Dividend out of Reserves - BR

Board Resolution for recommending declaration of dividend out of reserves

"RESOLVED THAT the Board of directors of the company do hereby recommend to the members of the company, the declaration and payment of a dividend at the rate of ten per cent on all the fully paid equity shares of the company out of the free reserves of the company that stood in the books of the company on _______ 20__ absorbing a total of ` ______, with due compliance of the Companies (Declaration and Payment of Dividend) Rules, 2014, and that, subject to the declaration by the members at the forthcoming annual general meeting, to the holders of the equity shares whose names will appear on the register of members on ________ 20__."

Change of Name of Company

Following is the basic procedure to change the name of Company.

1. Name Availability

Company is required to file an application for availability of proposed name of the Company. This application is filed in RUN Application.

2. Shareholders Approval

Once the new name is reserved, shareholders’ approval is required to pass following special resolution.

- the change in name of the Company and to alter the Memorandum and Article of Association with regard to change in name of the Company

3. Central Government's approval

Once the shareholders' approval is obtained, the Company is required to file application in Form INC-24 to Registrar of Companies (ROC) within 30 days for shareholders' approval.

4. Issue of Fresh Certificate of Incorporation

Upon approval of application (as per point 3 above), the Fresh Certificate of Incorporation upon change of name will be issued by ROC.

Pre-requisites for change of name of Company

Pursuant to Rule 29 of Companies (Incorporation) Rules, 2014, the change of name shall not be allowed to a company which has defaulted in filing its annual returns or financial statements or any document due for filing with the Registrar or which has defaulted in repayment of matured deposits or debentures or interest on deposits or debentures.

Hence, before moving forward, it is necessary to complete pending filings of annual returns or financial statement, if any.

Steps to complete this Process

Step - 1: Send atleast 7 days' notice to hold Board Meeting

Step - 2: Hold the Board meeting at decided date for passing following resolutions

- to authorise any Director to file application for availability of new name (RUN Application)

- to approve change of name of the Company, subject to approval of Shareholders

- to decide the date, time and place for holding Extraordinary General Meeting (EGM) and issuing atleast 21 days' notice to all the shareholders.

Step - 3: File Application for availability of new name (RUN Application) with following attachments
- Board Resolution for availability of new name (refer Step - 2)
- Any other document as required on case to case basis

Step - 4: Upon approval of application, ROC will issue a certificate for reserving a new name

Step - 5: Hold an EGM at decided date for passing following special resolution

- to approve change of name of the Company and authorising any Director to file application to ROC for Central Govt's approval (Form INC-24) (Click here for format of resolution)

Step - 6: File Form MGT-14 within 30 days from the date of passing of resolutions in EGM with following attachments

- signed copies of Special Resolutions with Explanatory Statement

- altered Memorandum of Association

- altered Article of Association

It is to be noted that SRN of Form MGT-14 will be filled up in Form INC-24.

Step - 7: File Form INC-24 within 30 days from the date of passing of resolutions in EGM

- Minutes of EGM in which special resolutions were filed (refer Step - 5)

- altered Memorandum of Association

- altered Article of Association
- Declaration by Directors with respect to deposits, debentures etc.

Step - 8: Upon approval of application (Form INC-24) by ROC, ROC will issue a fresh certificate of Incorporation.

Notice for Appointment as Director

This is a notice to be submitted under Section 160 of Companies Act, 2013 by a person who wants to be appointed as Director in a Company.

RBI Updates: AIFs now can be "qualified buyers" under SARFAESI Act

Reserve Bank of India (RBI) allowed Category II and Category III Alternative Investment Funds (AIFs) who are registered with SEBI to act as "Qualified Buyers" under SARFAESI Act.

By issuing a notification dated 05th July, 2018, RBI has allowed AIFs registered with SEBI to act as "Qualified buyers" under clause (u) of sub-section (1) of Section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. However, they should follow comply with following conditions:

1. The AIF which has invested in an asset reconstruction company (ARC) shall not invest in the security receipts issued by that ARC.

2. The AIF shall not invest in the security receipts issued on the underlying loans of any of its associate or group company.

3. The AIF shall not invest in the security receipts backed by non-performing assets of banks which hold equity of more than 10% in that AIF

Copy of such notification can be accessed below.

SEBI Updates: SEBI reviews mechanism of dividend adjustment for stock option

SEBI on 05^th July, 2018, issued a Circularfor reviewing the mechanism of dividend adjustment for stock options and allowed alteration in strike price.

According to the SEBI, adjustment in strike price will be carried out in case dividend declared by a company is above 5 per cent of the underlying stocks. Besides, adjustment in strike price will be done in all other cases of dividend, wherein listed company has sought exemption from the timeline prescribed under listing and disclosure regulations, SEBI said in a circular.

According to the SEBI, adjustment in strike price will be carried out in case dividend declared by a company is above 5 per cent of the underlying stocks. Besides, adjustment in strike price will be done in all other cases of dividend, wherein listed company has sought exemption from the timeline prescribed under listing and disclosure regulations, SEBI said in a circular.

Strike price, in market parlance, is the price at which a derivative contract can be exercised. It is mainly used to describe stock and index options. For call options, the strike price is where the security can be purchased by the option buyer up till the expiration date. For put options, the strike price is the price at which shares can be sold by the option buyer.

Copy of Circular can be accessed below.

SEBI Updates: SEBI raises overseas investment limit of AIFs and VCFs

SEBI by issuing a Circular dated 03rd July, 2018 enhanced the overseas investment limit of Alternative Investment Fund (AIFs) and Venture Capital Fund (VCFs) to USD 750 million from the current USD 500 million

The decision has been taken in consultation with the Reserve Bank of India, the Securities and Exchange Board of India (SEBI) said in a circular. In order to monitor the utilisation of overseas investment limits, SEBI has asked AIFs and VCFs to mandatorily disclose the utilisation of the such limits within 5 working days of such usage on the regulator's intermediary portal. 

In case an alternative investment fund (AIF) or venture capital fund (VCF) has not utilised the overseas limit granted them within 6 months from SEBI's approval, the same will have to be reported within 2 working days after expiry of the validity period. 

"In case an AIF or VCF has not utilized a part of the overseas limit within the validity period, the same shall be reported within 2 working days after expiry of the validity period," the regulator noted.

Further, if an AIF or VCF wishes to surrender the overseas limit at any point of time within the validity period, the same will have to be reported within two working days from the date of decision to surrender the limit, it added. The regulator said it has decided to enhance the overseas investment limit of AIFs and VCFs to USD 750 million. 

Earlier in October 2015, the regulator had allowed overseas investment by AIFs and VCFs to the extent of USD 500 million.

AIFs are funds established or incorporated in India for the purpose of pooling in capital from Indian and foreign investors for investing as per a pre-decided policy, while VCFs are investment funds that manage the money of investors who seek private equity stakes in startups.

Copy of Circular can be accessed below:

Source: Economic Times