Shareholders on issue of shares in proprietary company

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The Corporations Act 2001 - Section 254D mentions about pre-emption for existing shareholders on issue of shares in proprietary company. 1) Before issuing shares of a particular class, the directors of a proprietary company must offer them to the existing holders of shares of that class. As far as practicable, the number of shares offered to each shareholder must be in proportion to the number of shares of the class that they already hold. Section 124 of the corporations Act mentions the legal capacity and powers of a company that a company has the legal capacity and powers of an individual both and outside this jurisdiction. A company has the power to issue and cancel shares in the company and issue debentures. Therefore, it is important for SEPL as per the shareholder agreement if the shareholders vote for issuing new shares.

Reference no: EM133856008

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