Clarification on article of association and related private placement
18-Aug-2023 (In Corporate Law)
Can a company do a private placement or preferred placement if the AoA or MoA do not specifically state so? The AoA states the 2 following points: Capital: "capital" means the share capital for the time being raised or authorised to be raised, tor the purpose of the Company. "Share" means share in the share capital of the company and includes stock except where a distinction between stock and share is expressed or implied AoA has clause 15 which states: 15. The Company may, from time to time, by ordinary resolution increase the share capital by such sum, to be divided into shares of such amount, as may be specified in the resolution. Is this valid enough to do the private or preferred placement or will the AoA have to be amended to specifically state so. The AOA does not restrict raising of fresh capital but also does not categorically state so. What should we consider?
AOA and Moa are basic guiding factors of the company to run the company. If the both does not categorised the raisings of fresh capital then BOD can unanimously by making Resolution can raise the capital. Your clause no. 15 does not specify the requirements you need to amend the clause to avoid any future complications.
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