consolidation of shares

[Shailesh Goyal]

Hello friends

Kindly give your suggestion on belowmentioned problem:

As per Section 94(1)(b) A limited company may consolidate and divide
all or any of its share capital into shares of larger amount than its
existing shares.

Further on page no. 1138 of Ramaiyaa it has been given that
consolidation is the process of combining a specified number of shares
into one new share.

now my query is whether to consolidate 50 share certificate consisting
of 50,000 shares into one share certificate of 50,000 shares is
covered under this section.

As Section as well as Ramaiya has not given any further interpretaion
of this clause of Section 94. It does not seem quite logical to
convene general meeting for consolidate share certificate of one
shareholder.

Kindly give your views and if possibel send me draft Board resolution
in this regard.

Regards

[Vivek Hegde]

Dear Mr. Shailesh

 

In my view, consolidation of share certificate is not covered by Sec 94. Just like splitting of share certificate, Board Resolution will do.

 

rgds
 

--
CS Vivek Hegde
Company Secretary in Practice
No. 405, 4th Block, 7th Cross
Koramangala, Bangalore-560034
Mob: 9019605118

[Nithya Jayakumar]

Dear Shailesh

 

Reference to consolidation in Section 94 is to share capital and not consolidation of share certificate.

 

Regards

J. Nithya

[shailesh goyal]

but consolidation of share certificate means consolidation of share capital also. If there any case law or circular of ministy, then kindly provide me. Also give board resolution, if possible.

 

Regards 

[Priti Astarag Patnaik]

Hi,

I think this is not a case of consolidation.

 

in consolidation the nominal value per share and total number of shares  will change

 

The example for consolidation will be

 

Original Nominal capital was Rs 10,00,000/- devided into 10,000 shares of Rs. 100 each

 

It may consolidate them into 1,00,000 shares of Rs. 10/- each

 

in this case you are issuing new share certificates in which no of shares is more than

previous certificate. and board will have enough power to deal this matter

--
with regards,

Mr. Priti Astarag Patnaik

[Rajesh Warrier]

Dear Mr. Shailesh,

 

Section 94(1)(b) deals with consolidation of share capital which means,,,,,, for example share of Rs. 1 each being consolidated into shares of Rs. 10 each.

 

Here, in your case the face value of the shares remains the same. Thus in your case it is not consolidation...

On Wed, Jun 10, 2009 at 12:31 PM, Nithya Jayakumar <nithyaj...@gmail.com> wrote:

--
Thanks
Regards
Rajesh A
Company Secretary
Kochi
Mob: 09846874314

[shailesh goyal]

thanks for all your valuable suggestion...

 

can anyone provide me draft resolution which i need to pass in board resolution regarding consolidation of share certificate...

 

Regards

[Rajesh Warrier]

 

Dear Sir,

 

 

Attached please find the resolution......hope it suffice your requirement.......and check for the AOA of the Company to see whether Board has the power to consolidate certificates.....

[shailesh goyal]

Thanx a lot......:)

 

Regards