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Query regarding paid up capital .. urgent .. please help !!!

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vsk

jmd

21 Points Posted on 04 January 2012

Hi,

Please help me regarding the Query about Increasing paid up capital.

I have 36% stake in a company whose authorised capital is 10 lakhs which is fully paid up.

My query is can the majority stake holder without my permission increase authorised share capital and then allot all the shares to himself or his associates and making the capital fully paid up, so as to dilute my stake to a negligible extent.

Does this act of his require just an ordinary resolution or a special resolution which requires 75% share holders approval.

Is there any other way, where the 64% stake holder can cheat us and dilute our stake to negligible level.

Thankx and regards.

Replies (1)

Guest

Posted on 05 January 2012

Dear VSK, Check articles of association of your company whether alteration of share capital clause required approval of members by way of OR (51%) or SR (75%). In case AOA does not explicitly require passing of SR then OR can be passed to increase authorised capital. For allotment of shares board resolution by simple majority is enough to be passed. There is no need to pass OR / SR.