Sponsored
    Follow Us:
Sponsored

Checklist for the Alteration of Share Capital under Section 61 of Companies Act, 2013 together with NCLT Rules, 2016

The constitution of NCLT (on June 01, 2016) as a single window mechanism which deals with Company Law related matter is a remarkable move as its aimed at providing speedy disposal of matters in an efficient manner.

Keeping in view these rules by aforesaid authority, a Limited Company having Share Capital, may alter its Share Capital, if authorised by Articles.

What Section says (Section 61):

(1) A Limited Company having a Share Capital may, if so authorised by its articles, alter its memorandum in its general meeting to-

(a) increase its authorised share capital by such amount as it thinks expedient;

(b) consolidate and divide all or any of its share capital into shares of a larger amount than its existing shares;

(c) convert all or any of its fully paid-up shares into stock, and reconvert that stock into fully paid up shares of any denomination

(d) sub-divide its shares, or any of them, into shares of smaller amount than is fixed by the memorandum, so, however, that in the sub-division the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived.

(e) Cancel shares which, at the date of the passing of the resolution in that behalf, have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled.

Please note:

The cancellation of Shares under sub-section (1) shall not be deemed to be a reduction of share capital as per Section 61(2)

Provided that no consolidation and division which results in changes in the voting percentage of shareholders shall take effect unless it is approved by the Tribunal on an application made in the prescribed manner.*

*It has been notified on June 1, 2016.

Checklist for Alteration of Share Capital under Companies Act, 2013:

1. Check Articles of Association. If there is no such provision, alter the provisions of Section 14 of Companies Act, 2013.

2. Make an application to the concerned Stock Exchange(s) and any other Stock Exchange where Company proposes to get its consolidated shares listed.

3. Convene and hold a Board Meeting to-

3.1. Pass a resolution approving the proposed consolidation of the Shares of the Company;

3.2. Fix time, date and venue for holding a general meeting of the Company to pass a special resolution,if so required by the articles;

3.3. Approve notice, agenda and explanatory statement to be annexed to the notice of the general meeting;

3.4. Authorise Company Secretary in practice/ practising Chartered Accountant/ Practising Cost Accountant to enter appearance (Rule 45(2) of NCLT Rules, 2016)

4. In the case of a listed entity, soon after the conclusion of the Board Meeting, send to the concerned Stock Exchange(s), particulars of such alteration of share capital of the Company.

5. Issue notice of the general meeting along with the explanatory statement (Section 101 & 102 of Companies Act, 2013).

6. Hold the general meeting and have the required resolution passed.

7. File with the ROC, MGT-14 along with a certified copy of the resolution, notice and the explanatory statement annexed to the notice of the general meeting at which the resolution was passed and copy of Memorandum of Association and Articles of Association, within thirty days of passing of the resolution.

8. Give notice as per the provisions of Section 64 of the Companies Act, 2013 to the Registrar in Form SH-7 as per Rule 15 of The Companies (share Capital & Debentures) Rules, 2014, within thirty days of passing of the resolution.

If consolidation and division, results in changes in the voting percentage of shareholders, it shall not take effect unless it is approved by the Tribunal in the following manner:

1. An application shall be filled in Form No. NCLT-1 together with the particulars contained in Annexure-B.

The application shall, inter alia, set forth the following:-

(a) provision of articles authorising such consolidation or division;

(b) existing capital structure of the company;

(c) new capital structure of the company after the consolidation or division;

(d) class of shares being consolidated or divided;

(e) face value of shares pre and post consolidation or division;

(f) justification for such consolidation or division;

The application shall contain the following particulars as given in Annexure- B:

(i) Copies of memorandum and articles of association;

(ii) Copies of audited balance sheets for past 3 years;

(iii) Resolution for allowing such consolidation or division and providing justification for the same;

(iv) Documents in proof of new capital structure and class of shares being consolidated or divided;

(v) Affidavit verifying the petition.

(vi) Bank draft evidencing payment of application fee.

(vii) Memorandum of appearance with copy of the Board’s Resolution or the executed Vakalatnama, as the case may be.

(viii) Two extra copies of the application

(ix) Any other relevant documents.

2. The company shall at least fourteen days before the date of hearing (Rule 71(3) of NCLT Rules, 2016):

(a) advertise the petition in accordance with Rule 35 of NCLT Rules, 2016; and

(b) serve, by registered post with acknowledgement due, a notice together with the copy of the application to the Central Government, Registrar of Companies and to the Securities and Exchange Board of India, in the case of listed companies and to the regulatory body, if the company is regulated under any other Act.

3. Where any objection of any person whose interest is likely to be affected by the proposed application has been received by the applicant, it shall serve a copy thereof to the Central Government, Registrar of Companies and the Securities Exchange Board of India, in the case of listed companies and to any regulator, if the company is regulated under any other Act on or before the date of hearing (Rule 71(4) of NCLT Rules, 2016).

4. Upon hearing the application or any adjourned hearing thereof, the Tribunal may pass such order, subject to such terms and conditions, as it thinks fit.

5. After obtaining order from Tribunal, a certified copy of the order shall be filed with the Registrar of Companies (ROC) within thirty daysof the receipt of certified copy in e-form INC-28.

PETITION FORMAT

FORM NO. NCLT. 1

General Heading for Proceedings

Before the National Company Law Tribunal,

Bench, at ________

In the mater of the Companies Act, 2013

And

In the matter of …… Ltd: (Name of the Company)

Columns required for filing of Original Application/ Reply / Rejoinder / Interlocutory Application or filing of additional documents under directions of the Bench

i. Details of Original Application / Reply / Rejoinder/ Interlocutory Application

Particulars of the Petitioner / Applicant / Respondent and state whether company, whether petitioner or not.

(Name, description, father’s / husband’s name, occupation, capacity, i.e. quashareholder, qua depositor and address)

ii. Jurisdiction of the Bench:

The petitioner declares that the subject-matter of the petition is within the jurisdiction of the Bench

iii. Limitation: (If applicable)

The petitioner / applicant further declares that the petition is within the limitation laid down in section ……. of the Companies Act, 2013 (where applicable)

iv. Facts of the case are given below:

(Concise statement of facts in a chronological order, each paragraph containing as nearly as possible a separate issue, fact or otherwise.)

v. Relief(s) sought.

In view of the facts mentioned above, the petitioner/applicant / respondent prays for the following relief(s):

(Specify below the relief(s) sought explaining the ground for relief(s) and the legal provisions (if any) relied upon)

vi. Particulars of Bank draft evidencing payment of fee for the petition or application made:

Branch of the Bank on which drawn:

Name of the issuing branch:

Demand Draft No………

Date…………..

Amount Rs………..

(Signature/Signature of Authorised signatory)

Date:

Place:

FORM NO. NCLT. 12

(see rule 45)

Memorandum of appearance

To

The Registrar,

National Company Law Tribunal . . . . . . . . . . Bench,

In the matter of . . . . . . . . . . Petitioner.

V.

. . . . . . . . . . Respondent

(C.P. NO . . . . . . . . . . of 20 . . . . . . . . . . )

Sir,

Please take notice that I, AB, Company Secretary in practice/ practising Chartered Accountant/ practising Cost Accountant, duly authorised to enter appearance, and do hereby enter appearance, on behalf of . . . . . . . . . . petitioner/ opposite party/ Registrar/ Regional Director/ Government of . . . . . . . . . . in the above-mentioned petition.

*A copy of the resolution passed by the Board of Directors authorising me to enter appearance and to act for every purpose connected with the proceedings for the said party is enclosed, duly signed by me for identification.

Yours sincerely,

Dated . . . . . . . . . . day of . . . . . . . . . . Address:

Enclosure: as aforesaid

Author – CS Ekta Maheshwari

E-mail: [email protected]

Disclaimer:

The entire contents of this article is solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation.. It doesn’t constitute professional advice or a formal recommendation. The author has undertook utmost care to disseminate the true and correct view and doesn’t accept liability for any errors or omissions. You are kindly requested to verify & confirm the updates from the genuine sources before acting on any of the information’s provided herein above.

Sponsored

Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.

Leave a Comment

Your email address will not be published. Required fields are marked *

Sponsored
Sponsored
Ads Free tax News and Updates
Sponsored
Search Post by Date
December 2024
M T W T F S S
 1
2345678
9101112131415
16171819202122
23242526272829
3031