Hye Folks,
One among several options to reconstruct the co. is to dissolve former one having fully paid up share cap. and form a new co. with partly paid up shares and to call balance amt. from shareholders.
Now, my question is can co. convert its fully paid up shares in partly paid up otherwise than in winding up?
I guess, co. cannot do so coz I didn’t find such provision in Co. law but still I want to confirm it.
Once the shares of the company are fully paid the liability of the shareholders cease to exist, insuch a situation you cannot add more liability by converting the fully paid shares to partly and thereby raise the amount. Its not possible .
And no shareholders will agree to that also. What you can do is to issue further shares to the existing share holders and thereby raise money after complying with all provisions of Companies Act.
Kindly rectify if I am wrong
Rgds
CS Jithesh
Saini Pati Shah & Co LLP, Chartered Accountants
Mumbai
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ADY & CO.
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