Shareholders resolution for increase in authorised capital

Resolutions 734 views 2 replies

JOSEPH DAVID

GM FINANCE

286 Points Joined August 2008

For a listed company shareholders approved increase in Authorised Preference Share Capital in Annual General meeting and now the Company does n’t want to increase and withdraw resolution by not filling FORM SH 7 (notice to registrar of any alteration of share capital) with ROC . In this context, we request you to clarify the following:

1). Whether the said Resolution passed at the General Meeting can be withdrawn by the company in the next Annual general meeting as the proposed increase is not required and same is discussed and approved in the subsequent Board Meeting.

2). Whether the said resolution is required to implement by paying the requisite fee when company wants to withdraw resolution.

thanks in advance

joseph david

Replies (2)

Charu Srivastava

Company Secretary

4210 Points Joined July 2010

One option, you can show it was not approved by the Shareholders in the Minutes, hence resolution proposed to increase the authorised preference Share Capital is not carried out.

Other views are solicited.

Krishan Singla

Corporate Law Advisor

1026 Points Joined April 2009

We have persumed that resolution has already been passed . Then it comes into effect immidiately and additional fee on the increased capital becomes a debt due to the Governement from that date . And in case it is not paid within prescribed time , the company has to pay fee alognwith interest thereon to the government . There is no alternative to reduce the authorised capital once it is increased. Moreover once a company pays the fee for increased capital , then there is no logic to reduce the capial. Off course the company modify the kinds of authorised capital within the limits already have. Regards