Ad-Free CAclubindia and daily updates on your mobile. Subscribe Now!

Alteration of share capital

Rohan Lunkad (3 Points)

22 August 2017

Does alteration of share capital require a ordinary resolution or special resolution to be passed in general meeting?

Reply
Follow
Share

4 Replies

Anil Joshi (Professor) (43 Points)
Replied 22 August 2017

In my opinion it requires Special Resolution. Sec. 61 says that a company may alter its share capital by amending MoA but the section is silent about the type of resolution. However Sec. 13 exclusively talks about procedure for changing MoA which states that it requires Special Resolution.
Some experts are of the view that since Sec 61 is silent, ordinary resolution is sufficient. But in my view that is not true. Sec. 61 says one can alter share capital 'by amending MoA'. Now when there is already a separate section 13 which prescribes procedure for changing MoA, there was no need to mention the type of resolution again in section 61. Hence Special Resolution is required as per Sec.13.

Rohan Lunkad (3 Points)
Replied 23 August 2017

But what if the MoA already contains a clause that the company can alter it's share capital

Anil Joshi (Professor) (43 Points)
Replied 23 August 2017

MoA is not supposed to have this kind of a clause to my knowledge. MoA will always mention specific clauses of capital. If it has to be altered you have to follow CA 2013 provisions.