Yes it is completely OK if you are raising funds from your personal assets.
Share transfer
We ourselves a Pvt ltd are acquiring 100% shares of a Pvt ltd company which is running but since promoters have aged they want to quit. Deal value is 11.5 Cr including land / building / stocks / all other liabilities. We have raised funds via 1) 6 Cr through LAP against our residential flats . In this since Directors individuals salary was not sufficient, PNBH made my company as co applicant. But cheque will be disbursed in Directors name . 2) Have mortgaged my existing unit and have taken 3 Cr from my present banker PNB. 3) Balance 2.5 Cr is my own internal funding . Planning to buy shares of 8.5 Cr in Directors name & balance 3 Cr shares in name of my company. My query 1) is it ok on purchase shares through this modality 2) Sellers have quoted 11.5 Cr value which we have done our internal due deligence and found more or less ok.
Asked 6 years ago in Business Law
6 Answers
1) If you have gone through proper banker they could've made this transaction more easy and you could've got sufficient funds from that bank as well against company goodwill.
2) The Bankers option banks are CitiBank, ICICI Bank, HDFC Bank.
3) Now coming to you're question kindly issue cheque against company director name who has sharing accordingly purchase all 100% share.
I will get back to you on your feedback with suitable answer.
1. Yes.
2. That's good you can go ahead
The arrangement seems good as the directors are getting the checks however the company is the co applicant you have to make sure that the liability of the company should be reduced as the property is going to be transferred to the individual directors name so basically the company is providing the guarantee at the directors of the company are the owner of the properties so in case of any default the company will be liable to pay and rest other arrangement is fine to go ahead with this please
Your company is already mortgaged, foe any default in repayment, bank can directly proceed agasint your company.
Cheque must issue acc. to proportion, 3cr in the name of company.
In my opinion, when you have planned to buy the entire shares, why do yo want to buy the same in the name of the directors, recuse the directors may change at any time for various reasons, wheres if the same is bought on the company's name, it may remain with the company as its assets, you can decide and reconsider your decision by analysing the pros and cons in this.
If your are satisfied with the rates quoted then you may go ahead with the purchase.
If your bankers are insisting to disburse the funds to the directors' name alone, then you may have no choice than to involve the directors in the purchase of shares besides company's shares.
