Looking through our constitution the only thing I can find mentioning loans are with regards from loans from the company to a member; not vice-versa. So I assume it runs under the standard terms from the corporations act or something?
NSW Corporations Act and Share Offerings
- Thread starter cyphix
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Looking through our constitution the only thing I can find mentioning loans are with regards from loans from the company to a member; not vice-versa. So I assume it runs under the standard terms from the corporations act or something?
You can take it to a vote of shareholders. There will be voting rules in the constitution that defines what % of shares you need (eg 51%, 75% etc) to pass the motion.
Equity for debt swaps are fairly common.
There will/may be tax implications but a reasonable accountant can advise you on this.
Equity for debt swaps are fairly common.
There will/may be tax implications but a reasonable accountant can advise you on this.
Thanks Rod.
Just another question........ if I wanted to turn some of my past loans from the company into capital / equity, does this mean ALL my loans to the company has to be turned into capital or would this in turn mean everyone's else loans will also need to be turned into capital as well?
Also, if they extend the offer to me, does that mean they have to extend it to everyone else as well?
Just another question........ if I wanted to turn some of my past loans from the company into capital / equity, does this mean ALL my loans to the company has to be turned into capital or would this in turn mean everyone's else loans will also need to be turned into capital as well?
Also, if they extend the offer to me, does that mean they have to extend it to everyone else as well?
No and not necessarily. It is important that others are not disadvantaged. It may be that no-one else wants the same option as you so there is no disadvantage to them.
Potentially yes. But, if others get the share issue for capital, then the no-disadvantage rule may become less important because they can get an advantage of new shares through their purchase.
Note that this becomes a shareholder issue, not a board issue and therefore you need a special company meeting to pass motions affecting shares.
Also, 1 minority shareholder cannot hold back a company from doing what it needs to grow or change, but the changes do need to done with board approval and in accordance with the company constitution. Much depends on your influence with the board.
Another question....... In general, if I wasn't able to buy the new shares, could the company call a general meeting after the fact and cast a majority vote to give myself shares provided I met some performance criteria for example? ...or would this disadvantage others? ...or would it be better to do before the fact?
Either way, does the vote have to be cast at a general meeting or doesn't it matter as long as a majority vote is given with minutes?
Either way, does the vote have to be cast at a general meeting or doesn't it matter as long as a majority vote is given with minutes?
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