Present herewith is the Procedure for Consolidation of Share Capital in a brief and concise manner after having gone through the relevant sections as well as concerned Rules under Companies Act of 2013 attached with allied Rules.
1. The company must firstly need to keep this thing in mind that its articles of association contain a clause, authorizing it to consolidate its shares, and if it’s not so, then the AoA has to be altered as per the provisions of Sec. 14 of the Companies Act, 2013.
2. Provide a 21 days clear notice to the stock exchanges that is listing the company’s securities prior to such consolidation taking place, so that both the company as well as the Stock Exchange get sufficient time to comply with all the necessary formalities and rules as have been mentioned.
3. Make an application to the stock exchanges where the securities of the company are listed and any other stock exchange where company proposes for getting its consolidated shares listed.
4. Hold an appropriate Board Meeting and pass the resolution for such consolidation of shares, fix a date, time as well as venue for conducting general meeting for passing such special resolution if required by the Articles of that Company, and thereafter approve the agenda as well as explanatory statement that should be annexed with notice of such general meeting as required u/s 101 & 102 of Companies Act of 2013, and at the end authorise company’s CS or any such authorised officer to issue such approved notice of general meeting by Board.
5. Particulars of such alteration needs to be send to such stock exchanges where the company is registered and securities are listed just after concluding the Board Meeting.
6. Issuing of notice concerning general meeting along with the explanatory statement, to all members, directors as well as auditors of the company.
7. If it’s a listed company, then copies of such notice need to be send along with the explanatory statement, to the concerned stock exchanges as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
8. Convene General Meeting and pass either Ordinary or Special Resolution, as the case and need arises or exists.
9. Forwarding a copy of the minutes of such general meeting to the concerned stock exchanges as SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
10. File with the ROC, Form MGT – 14 along with a certified copy of the resolution, notice and the explanatory statement as have been attached with the notice of the general meeting at which the resolution was passed and copy of altered Memorandum of Association and Articles of Association, within thirty days of such resolution having been passed.
11. Give such notice concerning that the company has complied with appropriate provisions as mentioned in Sec. 64, Companies Act, 2013, of the consolidation of the shares of the company, to the Registrar in Form SH – 7, within thirty days of such resolution having been passed, and with the prescribed filing fee as specified. And after satisfying all such conditions, the Registrar will record such change/modification in the memorandum of the company.
12. In the case of a listed company, forward to the concerned stock exchanges copies of all the notices sent by the company to its members with respect to the alteration of the conditions in the memorandum of association and six copies (one of which must be certified) of such amendments to the memorandum of association as soon as they are adopted by the company in general meeting, as per the Listing Regulations signed with the stock exchanges.
13. And at the end, make such requisite changes in the Memorandum of Association after complying with all such formalities so that no kind of unaltered copies, if any, get issued to any other members or concerned persons.
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