special resolution

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Querist : Anonymous

Querist : Anonymous (Querist)

07 August 2010 can any one provide resolution regarding reduction of capital

CA Sanat Pyne

CA Sanat Pyne (Expert)
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07 August 2010 Specimen of resolutions for Reduction of share capital
RESOLVED THAT subject to the confirmation of the High Court/Tribunal, consent of the Company be and is hereby given to the reduction of share capital of the company from Rs 20,00,000 divided into 2,00,000 shares of Rs 10 each to Rs 15,00,000 divided into 2,00,000 shares of Rs 7.50 each and the said reduction be effected by extinguishing the liability on these Equity shares in respect of share capital not called up and paid up.
RESOLVED FURTHER THAT the corresponding amendments are made in Clause V of the Memorandum of Association and Article 6 of the Articles of Association of the Company.
RESOLVED FURTHER THAT the Board of directors of the Company be and is hereby authorised to take steps for obtaining the High Court/Tribunal's Order, delegate powers to Managing Director, finalise the scheme of reduction, effecting modifications as per the order of Court/Tribunal, finalise the terms and conditions of debenture issue and to do all such acts, deeds and things necessary for the purpose of giving effect to this resolution.
Explanatory statement
The Companies Act, 1956 provides for reduction of share capital under section 100-104. The companies activities have been reduced due to take over of import trade by the Governmental Agency. So
the need of capital as felt before is not at present there. It would not be advisable to make further calls, as no dividend has been paid by the Company for the last few years. Since the Company has no outside creditors, it may receive the Court/Tribunal sanction. None of the directors is interested in the resolution.
Alternate Resolution
RESOLVED THAT subject to confirmation by the Hon'ble High Court at Calcutta, the paid-up capital of the company be reduced from Rs. 40,00,000 divided into 4,00,000 Equity Shares of Rs. 10 each to Rs. 11,04,160 divided into 3,31,248 Equity Shares of 31/3rd of a Rupee each by canceling 68,752 Equity Shares of Rs. 10 each fully-paid-up held by the ........................ Ltd., in the company in terms of the proposed Scheme of Amalgamation of .................. Ltd. with the company and by further canceling a sum of 62/3rd of a Rupee per share on 3,31,248 equity shares of Rs. 10 each, which capital has been lost and is unrepresented by the available assets.”
RESOLVED FURTHER THAT on such reduction the said 3,31,248 equity shares of 31/3rd of a rupee each be consolidated and divided into 11,042 equity shares of Rs. 100 each fully paid-up by consolidating thirty equity shares of 31/3rd of a rupee each into one equity share of Rs. 100 each fully paid-up and by issuing and allotting 4 equity shares of Rs. 10 each to the shareholders as may be required to enable consolidation of their holdings into shares of Rs. 100 each for cash at par and that the Board may be authorised to sell the shareholdings of any shareholders not having the reduced shares in lots of thirty shares each on such consolidation and allotment of further shares and to pay the net sale proceeds to the shareholder concerned.
RESOLVED FURTHER THAT consequential amendments be made in the capital clause of the Memorandum of Association of the Company after such reduction and consolidation becomes operative and effective.
RESOLVED FURTHER THAT on such further reduction and consolidation becoming operative and effective, every member of the company do surrender to the company his old share certificate(s) in respect of the share(s) held by him and thereupon the company shall issue fresh share certificate(s) to the said shareholder and/or pay the net sale proceeds to which he may be entitled to as aforesaid.

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