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1 In a public issue by an unlisted company, the promoters shall contribute not less than 20\% of the post issue capital. 4.2. 1 The promoters shareholding after offer for sale shall not be less than 20\% of the post issue capital.
Can a company make you sell your shares?
The answer is usually no, but there are vital exceptions. Shareholders have an ownership interest in the company whose stock they own, and companies can’t generally take away that ownership. The two most common are when a company gets acquired and when it has an agreement among shareholders calling for forced sales.
SEBI said that promoters can sell 20\% of their shares within 18 months after listing, instead of the current waiting period of three years. Pre-IPO investors will now have a lock-in period of six months instead of one year.
What is lock in period in shares?
A lock-up period is a window of time when investors are not allowed to redeem or sell shares of a particular investment. Hedge fund lock-ups are typically 30-90 days, giving the hedge fund manager time to exit investments without driving prices against their overall portfolio.
What happens when a promoter sells stake in a company?
Promoters tend to sell stake either to reduce the debt or to invest further. Promoters also tend to pledge shares to raise funds to meet short term obligations. The share rates will rise if Promoter selling Stake for Any Development Purpose like New Business Expansion etc . Otherwise share rates will go negative .
Can a promoter secretly earn profit from a co-promoted company?
A promoter can not secretly earn profit from a co-promoted company. If he does that he is equally liable to his other promoters to share the profit percentage with them, these rights are known as ” RIGHT TO RECOVER EQUAL AMOUNT”. The promoter will receive a payment from the company in a form of remuneration.
Can a promoter ask for money back from a company?
When a promoter set up a company, he/she spends money on that company’s promotion, registration, and all the other legal process. If the company grows well and becomes a multi-promoters company, then that founder/promoter can ask for the money back.
How do I become a promoter of a company?
There are various ways to become a promoter of a company. You can put your money on a grassroots company as a firm of that company or you can also start your own business and invest your money in that. These are the basic ways to become a promoter of a company.