Inter Change in Authorised Share Capital

Resolutions 4999 views 5 replies

Muralidharan

Self Employed

1035 Points Joined December 2008

Dear Forum Members

The Authorised share capital of a public limited is Rs.15.25 crores divided into 12,00,000 equity shares of Rs.10/- each and 32,50,000 preference shares of Rs.10/- each.

The paid-up capital is Rs.12,88,00,000/- divided into 96,30,000 equity shares of Rs.10/- each and 32,50,000 preference shares of Rs.10/- each.

The company is going to convert the preference capital into equity capital as per original terms. The existing authorised equity capital is inadequate to accommodate the converted equity shares. The company also do not want the preference shares in the authorised capital. Hence it is proposed to alter the Authorised Capital clause as Rs.15,25,00,000/- divided into 1,52,50,000 equity shares of Rs.10/- each. This will only be a mere alteration in the existing authorised capital by passing requisite resolutions at an EGM. According to me no fees is payable to ROC as there is no enhancement in authorised capital (this is only interchange of the existing authorised capital)

Kindly advise whether the same will be in accordance with the provsions of the Act.

with regards

Muralidharan

Replies (5)

Karan Ramchandani

Company Secretary

72 Points Joined April 2010

Yes, there is no need to pay Additional Stamp Duty as the Stamp duty is already paid on Authorised Capital and this is only a rearrangement of Capital structure.

However you need to file form 5 & form 23 with the ROC of Rearranging the Authorised Share Capital Structure.

Regards

Karan

joyson dmello

Article assistant

47 Points Joined March 2010

Supoose it is a situation of authorised and issued capital in a public limited company.
Equity shares of Rs. 10/- 100.00 crore
Compulsory Convertible
preference shares of Rs.100/- 100.00 crore
Total Authorised capital 200.00 cr.
Total issued capital 200.00 cr.

The CCPS are copulsory convertible with in specified time in equity ahres of Rs.10/- at par.

The CCPC are going to due for conversion. Now my question are follows :-
1. whether the company is required to increase its authorised capital for conversion of preference shares into equity shares ? If yes, why when the total capital after conversion shall not increase Rs. 200.00 crore.

2. whether the company can change the class of shares from CCPS to equity shares in authrised capital simultaneously at the time of conversion?
3. If yes, whether shareholder approval is required for change of class ? Please note that shareholders has already given approval for issue of CCPS and as per approval these shres are compulsory convertible in equity shares with in specified time?
4. If the company can change the class of shares, whether it shall attract ROC fee?
5. How the procedure take place simultaneously for change of class of shares in authorised capital and conversion of CCPS into equity shares ?
6. whether form 2 and form 5 are required to file?

Please send your expert views on this matter.

LAKSHMANARAO UDANDRAO

Deputy General Manager Finance and Accou

236 Points Joined May 2008

As per me no need to pay ROC fee and stamp duty as there is no increase in the over all authorised capital.

However, you need to file Form 2 for allotment of shares, Form 5 for the interchange of authorized capital structure and Form 23 for registration of resolution with ROC.

CS Ankur Srivastava

Company Secretary & Compliance Officer

17858 Points Joined November 2008

For bifurcation of Authorised Share Capital, no Additional Stamp duty is to be paid.

Sangeeta

Company Secretary

46 Points Joined March 2013

A pvt. ltd company is having an authorised share capital of Rs. 1000000 divided into 4000 Equity Shares of Rs.100/- each, 2000 12% Pref. Shares of Rs.100/- each and 4000 11% Non-Cum.Pref. of Rs 100/- each. Now the Comapny wants to rearrange its capital structure by converting its preference shares into equity shares, thus, after the rearrangement the authorised capital of the company shall be Rs. 10,00,000 divided into 10,000 equity shares of Rs. 10 each.

As far as my knowledge, pursuant to Section 16, 94 and 95, the conversion is to be effected by passing an ordinary resolution at an EGM and Form 23 and 5 is to be filed, for change of MOA and rearrangement of Auth. Cap. respectively.

Do I need to do anything else?What else is to be complied with?

Kindly give me a resolution for conversion of Pref. Shs into Equity shares.

Regards,

CS sangeeta ghose.