Alteration of class of authorised capital

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 July 2010 Supoose it is a situation of authorised and issued capital in a public limited company.
Equity shares of Rs. 10/- 100.00 crore
Compulsory Convertible
preference shares of Rs.100/- 100.00 crore
Total Authorised capital 200.00 cr.
Total issued capital 200.00 cr.

The CCPS are copulsory convertible with in specified time in equity ahres of Rs.10/- at par.

The CCPC are going to due for conversion. Now my question are follows :-
1. whether the company is required to increase its authorised capital for conversion of preference shares into equity shares ? If yes, why when the total capital after conversion shall not increase Rs. 200.00 crore.

2. whether the company can change the class of shares from CCPS to equity shares in authrised capital simultaneously at the time of conversion?
3. If yes, whether shareholder approval is required for change of class ? Please note that shareholders has already given approval for issue of CCPS and as per approval these shres are compulsory convertible in equity shares with in specified time?
4. If the company can change the class of shares, whether it shall attract ROC fee?
5. How the procedure take place simultaneously for change of class of shares in authorised capital and conversion of CCPS into equity shares ?
6. whether form 2 and form 5 are required to file?

Please send your expert views on this matter.

Jagruti (CS)

Jagruti (CS) (Expert)
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09 July 2010 Below are your answers

1. Yes, because authorised capital as stated by you for preference shares is 100 Crore which is already issued and paid. So either you can go for increase in the authorised capital or alternatively you can go for re-classification of shares.

2. Yes you can simultaneously go for reclassification of shares at the time of conversion.
3. Yes, shareholders approval will be required by way of ordinary resolution
4. ROC fee will be attracted for Filing Form 5 for conversion of CCD into Pref Shares only.

5. Yes both forms have to be filed i.e.
Form 5 – either for increase in authorised capital or reclassification
form 2 – issue of equity / pref shares on conversion

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