Reduction of Face Value of shares and Increase of authorize capital
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Prabhakar KS
Jul 20, 2012, 9:25:43 AM7/20/12
to CSChennai, csmysore
Dear Members,
One of our client wants to reduce its face value of shares i.e. from Rs. 10 to Rs. 1 and also wants to increase its authorised share capital with new face value i.e. Rs. 1/- in the forthcoming EGM.
My query is : Can a company reduce its face value of shares and also increase its authorised share capital in the same EGM ? is it right can a company approve both resolutions in a single AGM ?
"One person with a belief is equal to
ninety-nine who have only interests - John Stuart Mill"
9740283835
Madhwesh K
Jul 20, 2012, 10:04:57 AM7/20/12
to csmy...@googlegroups.com
Dear Mr. Prabhakar,
1. With respect to reduction of face value contemplated, there are two cases as follows. Please confirm which case is applicable in your query:
a. Sub-division of shares in which the total paid up capital is unchanged, but the face value is sub-divided OR
b. The total paid up capital is reduced (u/s 77A or 100)
2. Any one of the case above constitutes one item of agenda at EGM. Increase in authorized capital amounts to another item of agenda in EGM. Both items can be approved at EGM with seperate resolutions. You may note that there is no prohibition in this regard. Because, one item is relating to face value / paid up capital & another is relating to authorized capital and practically they dont effect each other.
Member's view solicited
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1. With respect to reduction of face value contemplated, there are two cases as follows. Please confirm which case is applicable in your query:
a. Sub-division of shares in which the total paid up capital is unchanged, but the face value is sub-divided OR
b. The total paid up capital is reduced (u/s 77A or 100)
2. Any one of the case above constitutes one item of agenda at EGM. Increase in authorized capital amounts to another item of agenda in EGM. Both items can be approved at EGM with seperate resolutions. You may note that there is no prohibition in this regard. Because, one item is relating to face value / paid up capital & another is relating to authorized capital and practically they dont effect each other.
Member's view solicited
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Thanks and Regards,
Madhwesh K
Practicing Company Secretary
9980672126
#180, 31st Cross,
Jayanagar 4th T Block,
Bangalore - 11
ramela rangasamy
Jul 20, 2012, 10:21:15 AM7/20/12
to csmy...@googlegroups.com
Dear Friend,
Resolution relating to both sub-division and increase can be passed in same GM.
R.Ramela
From: Prabhakar KS <prabhak...@gmail.com>
To: CSChennai <csch...@googlegroups.com>; csmysore <csmy...@googlegroups.com>
Sent: Friday, 20 July 2012 6:55 PM
Subject: [CSMysore] Reduction of Face Value of shares and Increase of authorize capital
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