Preferece Share conversion

Others 3375 views 5 replies

VS Vedhagiri

Chartered Account

96 Points Posted on 21 January 2008

Dear Colleques

Ours is a Public limited Company closed held with an authorised capital of 50 crores divided into equity share capital of 35 crores and Redeemable Preference Share Capital of 15 crores.Paid up equity share capital is 25 crores and paid up preference share capital is ZERO. An amount of 15 crores is credited to the account of share application money pending allottment of shares to be issued as equity share capital over and above 25 crores.

I would like to whether prefrence share capital of 15 crores can be converted into equity share capital so that I do not have increase the authorised capital and pay the stamp duties.

Please advise with relevant section.

S.Giri

Replies (5)

shilpa

company secretary in practice

148 Points Posted on 22 January 2008

No you can not convert the Preference shares into Equity Shares. So better option is to Increase the Authorised Capital or to issue Preferrnce Shares.

Guest

460605 Points Posted on 06 February 2008

There is no need to increase the Authorised Share capital.This is a case of re-classification of capital.So you can increase the Equity capital by cancelling the equal amount of preference capital.

Guest

460605 Points Posted on 15 March 2008

our company is a closely held public company, we are convert the optionally convertably preference shares into equity shares,

my query is

- do we need 81(1A) authorisation

- do we need to file form-2 for the return of allotment of equity ater the conversion , although the total subscribed capital would remain the same

- do we need to file form-5 for redumption of preference share under section-95(1)(e)

chetan

Guest

460605 Points Posted on 15 March 2008

can some one provide me with a secheme of capital reduction under section100 of the companies Act, 1956 with resect of reduction of capital by PROFIT MAKING CONCERN

chetan sharma

comapny secretary