December 15, 2023 at 09:05 AM
Section 61 of the Companies Act 2013 states ways of alteration of the share capital in a company that is limited by shares and provides guidelines on how to fetch it in the company’s MOA and AOA. While Section 64 states the Procedure for altering the capital of a company.
Under Section 61 of the companies act 2013, a company limited by shares may, if authorized by its articles of association, alter the capital clause of its memorandum of association in any of the following ways as stated in section 61.
(1) of the Companies Act, 2013, a restricted organization having an offer capital may be assuming this is the case approved by its articles, change its update in its comprehensive gathering to –
(a) increment its approved offer capital by such sum as it suspects conveniently;
(b) solidify and partition all or any of its portion capital into portions of a more significant sum than its current offers:
Given that no solidification and division which brings about changes in the democratic level of investors will produce results except if it is endorsed by the Tribunal on an application made in the recommended way;
(c) convert all or any of its completely settled up shares into stock, and reconvert that stock into completely settled up portions of any group;
(d) sub-partition its portions, or any of them, into portions of more modest sum than is fixed by the update, thus, nonetheless, that in the sub-division, the extent between the sum paid and the sum, if any, neglected on each decreased offer will be equivalent to it was on account of the request from which the diminished offer is determined;
(e) drop shares which, at the date of the death of the goal for that sake, have not been taken or consented to be taken by any individual, and lessen how much its portion capital by how much the offers so dropped.
The dropping of offers will not be considered to be a decrease in offer capital.
The following steps should be followed for altering the share capital of the company :
1) Authorised by AOA: the right to alter the share capital must be given in the articles of association of the company.
2) To pass a Resolution: Alteration can be effected in the capital by passing an ordinary resolution which must be passed in a general meeting of the company
3) Confirmation of NCLT is not required: For such an alteration of capital, the confirmation of NCLT is not required.
4) Notice to Registrar: The company shall give notice of the alterations to the registrar within 30 days of doing so.
5) Change by Registrar: The Registrar will record the above notice and make necessary alterations in the Memorandum and Articles of the company.