Abhinay Kumar (Senior Officer) (32 Points)
21 September 2010Dear folks,
Could you please provide resolution for Conversion of preference shares into equity.
Thanks & regards
Abhinay
Ajay Mishra
(Company Secretary)
(74337 Points)
Replied 21 September 2010
Dear Friend
Please find Resolution:
"RESOLVED THAT pursuant to the special resolution passed under Section 81(1A) of the Companies Act, 1956 by the shareholders of the Company at the Extraordinary General Meeting held on ……and in principle approval received for ………00,000 (….) warrants convertible into equity shares at a later date from the National Stock Exchange (NSE) and Bombay Stock Exchange Limited (BSE), ……000 (……….) equity shares of Rs.10/- (Rupees Ten each), in the share capital of the Company bearing distinctive No. ……… – …… be and are hereby allotted to XYZ Limited, New Delhi-110058, by conversion of equal number of warrants issued at a price of Rs. 13/- per shares (including a premium of Rs. 3/- per warrant).
RESOLVED FURTHER that any Director or Company Secretary of the Company be and is hereby authorized to file the return of allotment pursuant to section 75 of the Companies Act, 1956 with the Registrar of Companies concerned in the prescribed form, and do all other necessary activities or formalities as may be required.”
reshmi
(CS- Final Student)
(33 Points)
Replied 21 November 2012
Is the same procedure to be followed for the conversion of preference shares into equity shares, in case of a private company? what would be the sample board resolution for the same.
reshmi
(CS- Final Student)
(33 Points)
Replied 21 November 2012
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17848 Points)
Replied 21 November 2012
In order to alther the Authorise share capital of the Company, it is required to pass Ordinary Resolution and file form 5.
Draft Ordinary Resolution is as under:
“RESOLVED THAT pursuant to the provisions of Section 94(1)(e), 94(1)(a), 95 and other applicable provision(s) of the Companies Act, 1956, if any, the un-issued Authorized Equity Share Capital of the Company to the extent of Rs.2,00,00,000/- (Two Crores Only) divided into 20,00,000 (Twenty Lacs) Equity Shares of Rs. 10/- each be reclassified as Preference Share Capital by way of cancellation of the said Authorized Equity Share Capital and creation in lieu thereof the Preference Share Capital of Rs. 2,00,00,000/- (Two Crores Only) divided into 20,00,000 (Twenty Lacs) Preference Shares of Rs. 10/- each, without altering the overall Authorised Capital of Rs. 10,00,00,000/- (Rupees Ten Crores Only).”
RESOLVED FURTHER THAT, Clause V of Memorandum of Association of the Company be substituted as under:-
“The Share Capital of the Company is Rs.10,00,00,000/-(Rupees Ten Crores Only) divided into 80,00,000 (Eighty Lac) Equity Shares of Rs. 10/-(Rupees Ten) each and 20,00,000 (Twenty Lac) Preference Shares of Rs.10/- (Rupees Ten) each with power to increase or reduce the capital and to divide and subdivide the shares into several classes and to attach there to respectively such preferential qualified or special rights, privileges or conditions, as may be determined by or in accordance with the Articles of Association of the Company for the time being and to vary, modify or abrogate any such rights, privileges or conditions in such manner as may be permitted by the Companies Act,1956, or as provided by the Articles of Association of the Company for the time being.”
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17848 Points)
Replied 21 November 2012
For the conversion of unissued preference shares to equity shares same procecure shall apply.
Sangeeta
(Company Secretary)
(46 Points)
Replied 24 June 2013
A pvt. ltd company is having an authorised share capital of Rs. 1000000 divided into 4000 Equity Shares of Rs.100/- each, 2000 12% Pref. Shares of Rs.100/- each and 4000 11% Non-Cum.Pref. of Rs 100/- each. Now the Comapny wants to rearrange its capital structure by converting its preference shares into equity shares, thus, after the rearrangement the authorised capital of the company shall be Rs. 10,00,000 divided into 10,000 equity shares of Rs. 10 each. As far as my knowledge, pursuant to Section 16, 94 and 95, the conversion is to be effected by passing an ordinary resolution at an EGM and Form 23 and 5 is to be filed, for change of MOA and rearrangement of Auth. Cap. respectively. Do I need to do anything else?What else is to be complied with? Kindly give me a resolution for conversion of Pref. Shs into Equity shares.
Regards,
CS sangeeta ghose.
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