As we incorporate a new company with an Authorized share capital of Rs. 2.5 Cr.,but now the Promoters of the company want to reduce the paid up share capital as shown in master data of the company,because by mistake they approved the said Auth. Share capital they do not have such amount to satisfy the rest of paid up share capital. Is there any remedy to reduce the capital and if not then what time period is they should for the transaction held under companies act 1956 companies act 2013.
Hi Rachna,
The authorised share capital in no way affect the liabilities or assets relating to the company. Its only a maximum amount of capital that the company can issue. Its the paid up capital that is of significance which needs to be taken into account while starting or carrying on the business. Further, there is no such procedure to reduce authorised share capital. The Bottomline - Your client should in no way be worried about the authorised share capital
Thanks & Regards
Amit Mishra
SMJ global advisors pvt ltd
New Delhi
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