Subdivision of Shares

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Ravi Gupta (Querist)

26 June 2010 A private limited Co. was incorpotrated in 2009 with Rs. 5 Crores Authorized Share Capital which contains Rs. 1 crore Equity Share Capital of Rs. 100 each and Rs. 4 Crore Optionally convertible pref. shares of Rs. 100 each. The Paid up Capital is Rs. 1 lac equity shares which devided in 1000 equity shares of rs. 100 each.
Now the Co. wants to sub divide its Equity shares face value to Ra. 10 each share from Rs. 100 each. and also after subdivision the Co. wants to increase its ASC to Rs 8 crore which contain Rs. 3.5 Crore in equity and Rs. 4.5 in pref shares. I have prepared the documents for sub division of eq shares and increase in ASC by making notice of EOGM and passing the O/R for both purposes. Now My query is that what should I do in case of paid up capital of Rs. 1 lac. should i have also pass an O/R in the same EOGM or not because from the consequence of subdivision in Authrised equity share capital from 100 to whether paid up equity wil effect or not?

Rasesh

Rasesh (Expert)

26 June 2010 In the EGM, the resolution for sub-division of face value should also provide for split in the face value of the existing share capital.

All the items for sub-division / split can be clubbed under one resolution.

The increase in ASC has to be a seperate resolution.

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Ravi Gupta

Ravi Gupta (Querist)

10 July 2010 thank you very much sir

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