Which resolution is to be passed.

Resolutions 1023 views 4 replies

Gargi Ranade

619 Points Joined January 2009

I am working in a Pvt. Ltd. Co. which is 100% subsidiary of the Japanese Co.

We want to amend article for reclassifying our existing Authorised Capital.

Prevailing Articles has the provision of subdivison of share Capital in smaller amount or larger amount .

However it does not talks about reclassification of shares. Hence first of all I should amend the articles to allow such reclassificaton.

Now by amending articles I want to allow reclassification of shares.

While adding Article for allowing reclassification Can I simply state that Shareholders in general meeting by passing Ordinary resolution can classify or reclassify its share Capital.

( original Article will be more elaborate but crux will be as above.) OR

Do I staturaily allow it through passing special resolution only???

Can I directly authorise Board through Articles, to clasify or reclasify the existing Authorised share Capital Structure?

Replies (4)

P C Agrawal

Registered independent director Past Ch

8229 Points Joined March 2007

1) For amendment of the Articles you have to pass special resolution.

2) As per Section 94(2) power for reclassification of shares can be exercised by the company in general meeting and not by the Board.

3) All resolutions to be passed at general meetings have to be ordinary resolutions only unless otherwise specified in the Act. There is no requirement of passing special resolution for reclassification of shares and hence it will be ordinary resolution.

Thanks

Gargi Ranade

619 Points Joined January 2009

Dear P.C. Agrawal Sir,

Thanks a lot for clarifying my doubt.

Gargi Ranade

619 Points Joined January 2009

Dear P.C. Agrawal Sir,

Thanks a lot for clarifying my doubt.

CS Ankur Srivastava

Company Secretary & Compliance Officer

17858 Points Joined November 2008

Originally posted by : Gargi Ranade
	I am working in a Pvt. Ltd. Co. which is 100% subsidiary of the Japanese Co. We want to amend article for reclassifying our existing Authorised Capital. Prevailing Articles has the provision of subdivison of share Capital in smaller amount or larger amount . However it does not talks about reclassification of shares. Hence first of all I should amend the articles to allow such reclassificaton. Now by amending articles I want to allow reclassification of shares. While adding Article for allowing reclassification Can I simply state that Shareholders in general meeting by passing Ordinary resolution can classify or reclassify its share Capital. ( original Article will be more elaborate but crux will be as above.) OR Do I staturaily allow it through passing special resolution only??? Can I directly authorise Board through Articles, to clasify or reclasify the existing Authorised share Capital Structure?

For amendment of Articles you need to pass Special Resolution and register the said changes through filing form 23.

For any change in the Capital Clause of MOA of the Company, you need to pass Ordinary Resolution and form 5 is to be filed. Therefore, you cannot directly authorise Board of Director to reclasify the shares.