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rupesh (Querist)
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03 June 2021 if the authorised share capital is 2000000 and the issued ,subscribed and paid up share capital is 1000000.mr.x a share holder holding 60% OF paid up share capital.Now is the owner of the company, the company further issues 1000000 shares to public.
now in this case will mr x is owner of the company as the company
further issued 1000000 more shares

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Asha Kanta Sharma online

Asha Kanta Sharma

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06 July 2024 In a company, ownership is typically determined by the percentage of issued, subscribed, and paid-up share capital one holds. Here’s how the scenario you described might unfold:

1. **Original Ownership**: Initially, Mr. X holds 60% of the paid-up share capital. This means he has a significant ownership stake in the company.

2. **Issue of Additional Shares**: When the company issues an additional 1,000,000 shares to the public, these shares will dilute the existing ownership. Dilution occurs because the total number of shares increases, but Mr. X's ownership percentage in terms of paid-up capital remains the same if he doesn't acquire any of the new shares.

3. **Impact on Ownership**: After the issuance of new shares, Mr. X's ownership in terms of percentage of paid-up capital will decrease unless he subscribes to or purchases some of these new shares. If he maintains his ownership percentage, he would need to acquire enough of the newly issued shares to keep his percentage of the total paid-up capital unchanged.

4. **Ownership Status**: Whether Mr. X remains the "owner" of the company depends on the context:
- **Control**: If Mr. X retains a majority stake in the paid-up capital (more than 50%), he may still have significant control over the company's decisions through voting rights.
- **Ownership vs. Control**: Ownership and control can sometimes be distinct concepts in corporate governance. Ownership is typically related to the percentage of equity held, while control pertains to the ability to influence decisions through voting rights.

5. **Legal and Practical Considerations**: In practice, ownership and control dynamics can vary based on shareholders' agreements, voting rights attached to shares, and corporate governance structures. Mr. X's status as a major shareholder with 60% before the new share issuance indicates significant ownership, but the impact of the new shares on his control would depend on various factors like voting rights and shareholder agreements.

In conclusion, while Mr. X may still hold a substantial ownership stake after the new share issuance, his exact status as the "owner" and the degree of control he maintains would depend on the specifics of the new share issuance and the company's governance framework.