Conversion of preference shares into equity shares

1) How your existing  paid up capital can exceed existing authorised capital?

2) Yes,  unissued preference shares can be cancelled and simultaneously new equity shares can be created by passing ordinary resolution in GM and filing SH-7.

3)  Paid up preference shares can be converted into paid up equity by following procedure u/s 48.

1) We wish to convert our paid preference shares into Equity shares. On such conversion, it will exceed the existing Equity Authorized capital. Thus, there is a question of increasing authorized equity capital.

2) Since it is required to pay huge stamp duty on such increment, we are planning to club authorized Preference with Authorized Equity.

3) Now. the major question is, can we club authorized preference with authorized equity, eventhough the authorized preference shares includes both issued and unissued portion.? In my  example given above, can total Rs. 3 Cr authorized preference shares (include Rs.2.5 cr paid up) be clubbed with Rs.7 Cr authorized Equity Capital and thereby increase up to Rs. 10 Cr Equity authorized Capital?

So that we will have sufficient limit for Equity capital though we convert Rs.2.5 Cr paid Preference Shares into Equity Shares.

Hi Swati, I have a similar case as you mentioned above. Can you throw some light on how did u completed the above issue?