https://www.taxtmi.com/article/detailed?id=11964 Where a loan carries an option to convert into equity, the terms must be approved by shareholders by special resolution before raising the loan; absent that approval, an allotment in lieu of loan is treated as issuance for consideration other than cash and must comply with the preferential/private placement framework and its procedural safeguards. Mischaracterising such allotment as a rights issue and failing to follow the private placement rules and filing requirements attracts officer-in-default liability and monetary penalties, with reduced scales available for a small company and directions for payment and return filing. en-us Tue, 17 Oct 2023 08:40:46 +0530 Tue, 17 Oct 2023 08:40:46 +0530 TaxTMI RSS Generator https://www.taxtmi.com/article/detailed?id=11964 Where a loan carries an option to convert into equity, the terms must be approved by shareholders by special resolution before raising the loan; absent that approval, an allotment in lieu of loan is treated as issuance for consideration other than cash and must comply with the preferential/private placement framework and its procedural safeguards. Mischaracterising such allotment as a rights issue and failing to follow the private placement rules and filing requirements attracts officer-in-default liability and monetary penalties, with reduced scales available for a small company and directions for payment and return filing. Articles Corporate Laws / IBC / SEBI Tue, 17 Oct 2023 08:40:46 +0530 https://www.taxtmi.com/article/detailed?id=11964