Legal issues around increase of share capital

Resolutions 617 views 2 replies

Tanuj Mittal

MBA

28 Points Posted on 16 December 2013

Hello,
I am director of a private limited company. The company has paid up capital of 100000 (10000 shares) Out of which I hold 2000 Shares. Now I am in London and the other promoters of the company who collectively hold 80% shares has passed an extraordinary resolution at my back and have increased the authorized share capital to 300000. They don't know I have an account with MCA and I can check all the filed documents. Is it allowed without my authorization or signature? if Yes, What is the percentage of votes or shares that is required to pass such a resolution successfully.

Replies (2)

Syam Kamal

Company Secretary

66 Points Posted on 17 December 2013

For increase in authorized capital and corresponding increase in MOA& AOA the following procedure (brief) are required

Holding a board meeting to approve the proposal and to call for an extra ordinary general meeting
Holding EGM and passing of special resolutions
Filing the details with MCA

Since you are in London you would have missed the notice of the Board Meeting. Companies Act, provision relating to serving of notice of the Board Meeting is given below:

“Notice of every meeting of the Board of directors of a company shall be given in writing to every director for the time being in India, and at his usual address in India to every other director”

Notice of General Meeting will be sent to the registered address of the shareholders. I don’t know which address is appearing in the register of members.

Hence, prima facie I don’t see any illegality to what has actually narrated here.