15 May 2010
One private limited company incorporated since 1960 has capital caluse as below:
Authorised capital of INR 10 lacs
a. Class A share of Rs 55,000 b. Class B Share of Rs.25,000 c. Class C Shares of Rs. 10,000 each (2 Shares) d. 9000 cummulative redeemable preference shares of Rs. 100 each
Now my query is, company wants to increase its Autho. capital by Rs. 10 lacs through equity capital....then in form 5 what should be the status of the new shares ....as it can not rank pari-passu with the existing shares...???
17 May 2010
The increased capital can be pari passu to a particular class of shares. If equity shares are issued only out of one class of shares, then a better option would be to also merge all the classes in the Authorised capital. If the shares are not issued, then you may change the class in the authorised capital at any point of time.
CAclubindia
