Ordinary Resolution for Approval of Sub-division/Split of Equity Shares of Company

The process of subdividing or splitting equity shares of a company is a significant decision that requires careful consideration and approval from the company’s shareholders. This article delves into the resolution for the approval of such subdivision/split of equity shares, in accordance with relevant laws and regulations.

Format of Ordinary Resolution for Approval of Sub-division/Split of Equity Shares of Company

“RESOLVED THAT pursuant to the provisions of Sections 61(1)(d) and other applicable provisions of the Companies Act, 2013 (“Act”) (if any), read with Relevant Rules made thereunder, applicable provisions of the Securities Exchange Board of India (listing Obligations and Disclosure Requirements) Regulations, 2015 (Including any statutory modifications or re-enactments thereof, for the time being in force), in accordance with the Articles of Association of the Company and subject to receipt of such other approvals, consents and permissions as may be required from concerned statutory authorities and subject to such other conditions and modifications as may be prescribed or imposed while granting such approvals and on recommendation of the Board of Directors of the Company (hereinafter referred to as “the Board”, which expression shall include any Committee of the Board of Directors), approval of the Members of the Company be and is hereby accorded for subdivision / split of the existing equity shares of the Company, such that 1 (One) equity share having face value of ₹ 10/- (Rupees Ten Only) each fully paid up, be sub-divided / split into ______ equity shares having face value of ₹ ________ each fully paid up, raking pari-passu with each other in all respects with effect from the Record Date.

RESOLVED FURTHER THAT the Record Date for the sub-division / split of existing equity shares shall be decided by the Board post approval of the shareholders and will be intimated to the Exchanges in due course.

RESOLVED FURTHER THAT pursuant to the sub-division / split of existing equity shares of the Company, all the equity shares of face value of ₹ 10/- (Rupees Ten Only) each consisting in the Authorised equity share capital existing on the Record Date, shall stand sub-divided / split as follows:-

RESOLVED FURTHER THAT pursuant to the sub-division / split of equity shares of the Company, all the equity shares of face value of ₹ 10/- (Rupees Ten Only) each fully paid up consisting in the issued, subscribed and paid up equity share capital existing on the Record Date, shall stand sub-divided / split as follows:

RESOLVED FURTHER THAT upon sub-division / split of equity shares as aforesaid and with effect from the Record Date:-

1. For the equity shares held in physical form, the existing share certificate(s) in relation to the said equity shares, shall be deemed to have been automatically cancelled and shall be of no effect and the Board, without requiring the members to surrender their existing share certificate(s), shall credit such sub-divided / split Equity Shares to the Demat Suspense Account of the Company and on providing the details of Demat Account, such sub-divided / split Equity Shares shall be credited proportionately to the concerned Demat Account of the shareholders, in terms of applicable regulations, rules, guidelines and Circulars as may be issued from time to time in this regard; and

2. For the equity shares held in dematerialized form, sub-divided / split equity shares shall be credited proportionately into the respective beneficiary demat account(s) of the Members held with their depository participants, in lieu of the existing credits present in their respective beneficiary demat accounts.

RESOLVED FURTHER THAT the Board be and is hereby authorized to do all such acts, deeds, matters and things to give such directors as they may in their absolute discretion deem necessary, proper or desirable to settle any question, difficulty that may arise with regard to the sub-division / split of the equity shares as aforesaid and to undertake such corporate actions as may be necessary and to carry out / execute all matters in connection therewith and incidental thereto in order to give full effect to this resolution including execution and filling of all the relevant documents with the Registrar of Companies, Stock Exchanges, Depositories and other appropriate authorities in due compliance of the applicable rules and regulations, without seeking and further consent or approval of the Members”

Conclusion: The approval of the resolution for the subdivision/split of equity shares is a crucial step in the company’s evolution. It ensures alignment with legal requirements and simplifies the process for shareholders. Understanding the implications and mechanisms involved in this resolution is essential for both the company and its investors. In conclusion, this resolution signifies a significant corporate action that paves the way for a more manageable and streamlined share structure. It reflects the company’s commitment to transparency and adherence to regulatory norms.