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CHANGE IN FACE VALUE OF SHARES

Neeta (Finance) (345 Points)

17 July 2010

Hello All

A company wants to change the face value of the shares from Rs.10 to Rs.1 per share.

1. Pass BM 2. Pass ordinary resolution in the GM. File for 5 and 23( if required due to change in articles ) Please tell me any other necessary compliances required.

Please provide a checklist / draft resolution for the same.

Thanks in anticiapation

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6 Replies

vivek (CS) (751 Points)
Replied 17 July 2010

CHECK LIST FOR SUB DIVISION OF SHARES

1. Intimation of the date of Board Meeting to Stock Exchanges.

2. Outcome of the Board Meeting to be intimated to Stock Exchanges immediately after the closure of the meeting.

3. Board may decide either to pass the resolution in AGM/EGM or through postal ballot*.

4. Dispatch of notice to shareholders for convening the AGM/EGM for passing resolution to alter the Capital clause Memorandum and Articles (if any).

5. Publication of Notice of AGM/EGM in the newspapers.

6. Ordinary Resolution for sub-division of shares and Special Resolution for alteration of Articles of Association (if required) need to be passed in the Shareholders Meeting.

7. Intimation of outcome of meeting to Stock Exchanges.

8. Fix the Record Date for this purpose in the Board Meeting & Intimation of Record Date to Stock Exchanges and NSDL/CDSL and publication of Record Date in News Papers (not mandatory).

(The record date shall be fixed keeping in view the shareholders holding shares in physical form and interested in getting the sub-divided shares allotted in electronic form – The Company shall send a letter along with an option form to all the shareholders to give an option to receive such shares either in physical or in demat form. The record date may preferably fixed 1 to 11/2 month after the date of AGM/EGM/Date of declaration of Postal Ballot to enable the company to get responses from the shareholders and to initiate corporate action as per the option exercised by them)

9. File Form No.23 regarding Special Resolution with ROC.

10. File Form No.5 for sub-division of shares.

11. To fix the Board Meeting for allotment of sub-divided shares.

12. Hold Board Meeting and allot subdivided shares.

13. Corporate Action Forms need to be sent NSDL/CDSL well in advance before the record date for obtaining new ISIN and activation thereof.

14. Intimate Stock Exchanges about the New ISIN No. and other information as required by the exchanges.

15. On record date, the shareholders who are holding their shares in electronic form will automatically get credited their accounts with the subdivided shares.

16. Dispatch of Physical share certificates to shareholders against exchange / cancellation of old share certificates as the case may be.

vivek (CS) (751 Points)
Replied 17 July 2010

Draft Board Resolution:

“RESOLVED THAT subject to the consent of the shareholders in the ensuing _____ general meeting/ through postal ballot the consent of the Board of Directors be and is hereby accorded for the sub-division of existing equity shares of Rs.10/- each fully paid up into _____ equity shares of Rs. --- /- each fully paid-up.

RESOLVED FURTHER THAT ___________________________<AGM/EGM/POSTAL BALLOT> seeking the approval of shareholders for amending Memorandum and Articles of Association for the said sub-division of equity shares.

RESOLVED FURTHER THAT Mr.---- , Managing Director and Mr.-------------, Secretary of the Company be and are hereby severally authorised to make an application to the Stock Exchanges where the Company’s share have been listed to deal in and for official quotation for the equity shares of Rs.5/- each of the Company and to do all such other things, matters and deeds and to comply with such other formalities and requirements as are directed by the said Stock Exchange(s) in connection with the enlistment of sub-divided shares.

vivek (CS) (751 Points)
Replied 17 July 2010

Draft AGM/EGM Resolution:

SUBDIVISION OF EQUITY SHARES.

RESOLVED that pursuant to the provisions of Section 94 and other applicable provisions, if any, of the Companies Act, 1956 and the provisions of Article _ of the Articles of Association of the Company and subject to the approvals, consents, permissions and sanctions as may be necessary from the appropriate authorities or bodies, each of the _______equity shares of the face value of Rs.10/- each in the authorised share capital of the Company be sub-divided into _______ equity shares of Rs. __/- each and Clause V of the Memorandum of Association and Article __of the Articles of Association of the Company be altered accordingly.

Neeta (Finance) (345 Points)
Replied 21 July 2010

Thank you for the replies .

needs further assistance , company's Authorised capital is 3,00,000/- and paid up is 100000/- ( ie 10,000 shares are only fully paid @ Rs.10 per shares ) As implied the change is intended to effect the authorised capital not yet issued as well as the paid up cap also. Plz tell me ,,, to effect the change in authorised as well as paid up capital ,, will it fine if ,,,, if we simply state that the consent is accorded for the sub-division of existing 30,000 shares of Rs 10 into 300000 shares of Rs. 1 each...

regars