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Reduction of share capital

Pawan Mittal (CA Final) (702 Points)

10 August 2013

Dear Experts,

We are having share capital of Rs. 4 lacs and we want to reduce it to Rs. 1 lakh.

Now what is the procedure for this.

What will be the amount of expenses to be incurred in the process?

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1 Replies

Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294) (3303 Points)
Replied 10 August 2013

a company proposing to reduce its share capital is required to take the following procedural steps:

1. Make sure that its articles of association contain a provision authorising it to reduce its share capital. If there is no such provision then the articles have to be altered in accordance with the provisions of Section 31 of the Companies Act, 1956, before attempting a reduction in its share capital, in any way.