Why Condition Precedent Certificate is important in SSA?

Why Condition Precedent Certificate is important in SSA?

In condition precedent, you generally put these condition when we draft share subscription agreement 

1.  company Board Meeting with respect to private Placement Of securities or Rights Issue and General Meeting 

2.  Promoters need to ensure that Due Diligence process is completed by that time 

3. valuation report(Registered Valuer as approved by IBBI ) is procured as per the procedure given in Companies Act 

4. If there are any waiver letter which needs to procured from the existing investors then you need see those conditions 

5.consents and approvals from Govt needs to be completed, No objection from promoters

6. updation of registers 

7. formulation of ESOP (% given to employees)

8. Business Development Agreement 

9. Management Contracts needs to completed 10. No Lien Account (If  Investors pump in money in the Company's Account which is already having charge with the bank then money of Investor is at risk so you need to ensure there is no lien in the account of the company)


This the major reason you need to procure a condition precedent certificate before moving with the closing aspects while drafting a share subscription agreement. 


This blog is authored by Company Secretary Ronak Gupta. He is author of many blogs and runs many websites and youtube channels. His work is dedicated to corporate laws, legal, secretarial, professional services and also in strategy formulations for corporates. Mail him at: csronakgupta23@gmail.com or call at :9910226715

Comments

  1. BryantMarch 29, 2021 at 12:34 PM

    Wow..Amazing blog.. This blog is very helpful for me. Thanks for sharing this information with us.If you need about accountants In bangalore and tax return services bangalore please click here.

    ReplyDelete

Post a Comment

Popular posts from this blog

Valuation of Shares and other Securities under Companies Act, 2013

As per Companies Act, valuation may be required to be made in respect of any property, stocks, shares, debentures, securities or goodwill or any other assets (herein referred to as the assets) or net worth of a company or their liabilities.  Under this article, we will consider valuation aspects of shares and other securities under companies act 2013. Who can conduct valuation of shares? after 31st January, 2019 only a person registered as Registered Valuer as per Section 247 are eligible to do valuation of Securities. Except Registered valuer no other persons like (Merchant Banker or Chartered Accountant) can do the valuation of Securities.  What is the validity of a valuation report given under Sec 247 of the Companies Act? It is valid upto 6 months usually. However, it depends upon events for which you are considering the Valuation report. Is valuation report required for rights issue? Not mandatory in case of rights issue. If rights issue is at the premium, then? Still not...
Read more

All about POSH Act

Image
We compliance officers usually calls POSH Act, but there is no such act, it is the nick name of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Introduction It was basically enacted for protection against sexual harassment of Women at workplace and also for the prevention and redressal of complaints of sexual harassment and connected matters.  So, this act is only for complaints filing and protection against Sexual harassment and not any other type of harassment. This act is only for Women and not for men, Men can't be able to lodge a complaint under this Act. This Act also tells about workplace, any kind of sexual harassment done within the premises of office or workplace is under the purview of  this act. Any kind of general sexual harassment and related matter is covered under Sec. 354 & 354A of Indian Penal Code. One more important point to note here that the Act does not use the word Employee or Women Employee (in the...
Read more

DIR 8 Intimation by Director

Image
FORM 'DIR-8' Intimation by Director  [Pursuant to Section 164(2) and rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014]   Registration No. of Company Nominal Capital           Rs.  Paid-up Capital Rs.  Name of Company Address of its Registered Office     To, The Board of Directors of XYZ Private Limited I, ________ son/daughter/wife of  __________  resident of  ________________ , Director/Managing Director/Manager in the company hereby give notice that I am/was a director in the following companies during the last three years:-   S.No Name of the Company Date of Appointment Date of Cessation 1   I further confirm that I have not incurre...
Read more