Alteration in authorised share capital

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 October 2013 My Clients company has authorized share capital as 100000, incorporated in 01/10/2012, now he want to increase Authorised Share Capital to Rs. 200000, and wants to issue this additional shares to the party who is not a director of the company but simply a shareholder.
i know how to file form 5 for increase in capital, however my question is there any proceedure for allotment of such shares to that member, if yes , plz post step by step process.....

Thanks for solving

Ajay Mishra

Ajay Mishra (Expert)
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22 October 2013 Procedure for increase in authorised capital of the company

Section 95 of the Companies Act, 1956 provides that a company having share capital shall give notice to the Registrar of Companies for alteration in share capital in e-Form 5 electronically within a period of 30 days from the date of the resolution passed by the company for alteration in share capital.

1. Convene a Board Meeting after issuing notices to the directors of the company to decide about the increase and to fix the date, time, place and agenda for convening a General Meeting.
2. To pass an Ordinary Resolution (Special Resolution if so required by articles) for the same.
3. Download Form -5 from www.mca.gov.in
4. Fill the details required such form except signature of the concerned person.
5. Opt the option to pay stamp duty electronically along with ROC fee on Form-5 with concerned ROC.
6. Please attached altered MOA and AOA with the Form-5 filed with concerned ROC .
7. File MOA along with stamped form-5 with concerned ROC (if required).
8. After approval of Form-5 from ROC make necessary changes in MOA and AOA and in all other papers and documents.

If you are increasing Authorised Capital by Special Resolution or also change in Article of Association it is required to file Form 23 with concerned ROC within 30 days from the date of passing such resolution.

Any increase in the authorized share capital would come into effect immediately on passing of any valid resolution in this behalf, and filing of the requisite Forms 5, 23, being a ministerial act and procedural in nature, would not influence the date of increase of the authorized share capital. [Kobian (P) Ltd. v Kobian India (P) Ltd. and Others (2005) 64 CLA 281 (CLB)].

Ajay Mishra

Ajay Mishra (Expert)
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22 October 2013 You will pay ROC fee of Rs. 3000/- with stamp duty as per applicable rate of your state where the registered office of the company is situated.

You also check what your article says regarding passing of resolution. Whether it is ordinary resolution or special resolution.

Ajay Mishra

Ajay Mishra (Expert)
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22 October 2013
PROCEDURE FOR ISSUE OF SHARES OF PRIVATE LIMITED COMPANY

The company can issue share in accordance with the provision of section 291 and 292 read with company’s article of association. The provisions of section 81 is not applicable to private limited company. There are following procedure or issuing and allotting shares:

1. After receiving share application money in bank account/cash, call a Board Meeting for issue and allot shares to the investor.
2. Hold Board Meeting for issue and allot shares
3. After issuing & allotting shares file Form-2 with ROC within 30 days from the date of allotment.
4. Issue shares certificate as per provisions of section 113 of the Companies Act, 1956.
5. Make entry in Minutes
6. Give the details of shareholders in Form-20B(Annual Return) with ROC annually with in 60 days from the date of AGM.

Regards

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