Procedure for sub division of Shares

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CS Alpesh Dhandhlya

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May 24, 2013, 1:55:24 PM5/24/13

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Dear Experts

For sub division of Shares Whether Special Reso is required or Ordinary Reso will suffice ?

CS Shainshad Aduvanni

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May 25, 2013, 1:07:09 AM5/25/13

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Procedure for sub-division of share capital

For sub-dividing the share capital of a company, the following procedural steps are required to be taken by the Board of directors.

1. It must make sure that its articles of association contain a provision authorising it to sub-divide its shares. If there is no such provision then the articles have to be altered in accordance with the provisions of Section 31 of the Companies Act, 1956, before proceeding to sub-divide its shares.

2. Give twenty-one days’ notice of the proposed sub-division of the shares of the company to the stock exchanges on which the securities of the company are listed.

3. Make an application to the stock exchanges on which the securities of the company are listed and any other stock exchange on which the company proposes for getting its sub-divided shares listed.

4. Convene and hold a Board meeting to—

(i) Pass a resolution approving the proposed sub-division of the shares of the company;

(ii) Fix time, date and venue for holding general meeting of the company to pass an ordinary resolution or a special resolution, if so required by the articles for this purpose [Refer Section 94(2)];

(iii) Approve notice, agenda and explanatory statement to be annexed to the notice of the general meeting as per Section 173(2) of the Act;

(iv) Authorise the company secretary to issue, on behalf of the Board, notice of the general meeting as approved by the Board.

5. Soon after the conclusion of the Board meeting, send to the stock exchanges, where the securities of the company are listed, particulars of such alteration of share capital of the company.

6. Issue notice of the general meeting along with the explanatory statement, to all members, directors and auditors of the company.

7. Forward three copies of the notice of the general meeting along with the explanatory statement, to the concerned stock exchanges as per the Listing Agreement.

8. Hold the general meeting and have the resolution (ordinary or special, as the case may be) passed.

9. Forward a copy of the proceedings of the general meeting to the concerned stock exchanges in case of a listed company.

10. If the resolution passed is a special resolution, file with the ROC, e-form 23 along with a certified copy of the resolution, the explanatory statement annexed to 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 the passing of the resolution along with the prescribed filing fee.

11. Give notice in compliance with the provision of Section 95 of the Companies Act, 1956, of the sub-division of the shares of the company, to the Registrar in e-form 5, within thirty days of the passing of the resolution, along with the prescribed filing fee specifying the shares sub-divided. The Registrar will record the alteration in the memorandum of the company [Refer Section 97].

The mandatory attachments alongwith e-form 5 are:

(a) Altered memorandum of association

(b) Altered articles of association

Note:

Stamp duty on e-Form 1, Memorandum of Association (MoA) and Articles of Association (AoA) can be paid electronically through MCA portal and in such case submission of physical copies of the uploaded e-Form 1, MoA and AoA to the office of the ROC is not required.

Payment of stamp duty electronically through MCA portal is mandatory in respect of the States which have authorized the Central Government to collect stamp duty on their behalf. In respect of the States from whom the authorization is yet to be received, the company will continue to pay stamp duty outside the MCA portal. List of states/union territories for which stamp duty cannot be paid electronically is available on the website of MCA.

In case stamp duty is not paid electronically through MCA portal, it is required to deliver simultaneously the original stamped physical copies of the uploaded eForm 1, MoA and AoA along with a copy of challan/receipt in the concerned office of RoC failing which such eForm shall be put into “Waiting for user clarification” in term of Regulatio n 17 of the Companies Regulations, 1956

Refund of stamp duty, if any, will be processed by the respective state or union territory government in accordance with the rules and procedures as per the state or union territory Stamp Act.

12. 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 Agreements signed with the stock exchanges.

13. Make necessary changes in all the copies of the memorandum of association of the company lying in the office of the company so that no unaltered copy is issued to any person.

SPECIMEN OF THE RESOLUTION FOR SUBDIVISION OF SHARES

(1) Ordinary Resolution

“RESOLVED THAT—

(i) pursuant to Section 94(1)(d) and other applicable provisions, if any, of the Companies Act, 1956, and Article... of Articles of Association of the company, all the 5,00,000 (five lakh) equity shares of Rs. 100 (Rupees hundred) each of the company be and the same be and are hereby sub-divided into fifty lakh (50,00,000) equity shares of Rs. 10/- (Rupees ten) each;

(ii) all the present shareholders holding in all 2,00,000 (two lakh) issued, subscribed and fully paid equity shares of Rs. 100 (Rupees hundred) each be issued, in lieu of their present shareholding, the number of fully paid consolidated equity shares of Rs. 10 (Rupees ten) each of the aggregate value equal to the amount paid by each shareholder on his/her existing fully paid equity shares of Rs. 100/- (Rupees hundred) each;

(iii) the Board of directors of the company be and is hereby authorised to take all the necessary steps for giving effect the foregoing resolution, including recall of the existing share certificates, issue of new share certificates in lieu of the existing issued share certificates in terms of the foregoing resolutions and in accordance with the applicable provisions of the Companies Act, 1956 and those of the Companies (Issue of Share Certificates) Rules, 1960.”

(2) Special Resolution

“RESOLVED THAT as a consequence of subdivison of the equity shares of the company, clause V (share capital clause) of the memorandum of association of the company be and is hereby substituted with the following:

“V. The authorised share capital of the company is Rs. 5,00,00,000 (Rupees five crore) divided into fifty lakh (50,00,000) equity shares of Rs. 10/- (Rupees ten) each”

Explanatory Statement

In order to maintain uniformity in the nominal value of the company’s equity shares with the nominal value of equity shares of other companies, the Board of directors of the company, at its meeting held on ............. resolved to take steps for sub-division of the company’s equity shares of Rs. 100/- (Rupees hundred) each into shares of Rs.10/- (Rupees ten) each.

Therefore, the proposed resolutions are commended to the shareholders of the company for their consideration and approval.

The directors of the company are interested in the proposed resolutions to the

extent of their respective shareholdings in the company.

On 24 May 2013 23:25, CS Alpesh Dhandhlya <alpes...@gmail.com> wrote:

Dear Experts

For sub division of Shares Whether Special Reso is required or Ordinary Reso will suffice ?

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CS Shainshad Aduvanni
Company Secretary
Coimbatore

09841414439

Alpesh Dhandhlya

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May 25, 2013, 11:09:43 PM5/25/13

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Thank you so much my heartiest friend

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Dear Sir

Thanks & Regards:

CS Alpesh R Dhandhlya

Company Secretary

Contact No. 9904478071

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