Alteration of equity share capital(paid up capital)

A Raghavendra (Senior Executive - Finance & Corporate Affairs)   (67 Points)

04 May 2016  

Dear Members / Experts,

I have an immediate issue to be attended at my office that is about paid up share capital:

In the case of Private Limited, to reduce the Equity share capital and to rise the preferential share capital, without disturbing the quantum of present Paid up capital I intend to take the following step:

  1. Firstly Issuing Preferential Shares to the extent we are intending to repay the Equity share holders.
  2. Secondly to repay the Equity share holders out of the funds raised form allotment of preferential shares issued.
  3. i.e., Presently the Paid up Capital (Equity) of the Company is say Rs.10,00,00,000/- [Rupees Ten Crores], now the management is intending to retain the same paid up capital structure in the following manner:
    1. Issuing the Preferential Shares to the extent of Rs.8,00,00,000/-
    2. With the Funds raised from the above, buy back the equity shares and repay the equity shares holders to the extent shares purchased from them(Buy back).

We need your opinion in this opinion, suggestions and contravening factors CA 2013 laws and rules and the ROC compliance as well in this regard.

Please expedite the same instantaneously and help me out in this regard..

Thanks & Regards.

Raghav