13 April 2016
below is my query if you can help me out it would be great. I want to reclassify equity shares to Prefernec shares. I know MOA will be amended by Passing OR. but I want to know whether AOA will also be amended or not. My capital clause in AOA is as below: "The Authorised Share Capital of the Company as mentioned in Clause V of the Memorandum of Association of the Company with power of the Board of Directors to sub-divide, consolidate and increase and with power from time to time, issue any shares of the original capital with and subject to any preferential, qualified or special rights, privileges or conditions as may be, thought fit, and upon the sub-division of shares apportion the right to participate in profits in any manner as between the shares resulting from sub-division." This is the general clause which most of the Co. adopt, but It doesnot specifically give authorisation to re-classify. Do I need to amend this clause and incorporate word Re-Classify????
14 April 2016
Reference : Section 13 & 62 of Companies Act., the AOA also needs to be amended by incorporating the word "reclassify" .
Please find draft clause for quick reference : ‘The Company may from time to time by Special Resolution in General Meeting classify and reclassify such shares from the shares of one class into shares of other class or classes and to attach thereto respectively such preferential, deferred, qualified or other special rights, privileges, conditions or restrictions as may be determined in accordance with the Articles of Association of the Company and to vary, modify or abrogate any such rights, privileges, conditions or restrictions in such manner and by such person as may for the time being be permitted under the provisions of the Articles of Association of the Company or legislative provisions for the time being in force in that behalf.’
14 April 2016
Thank you so much Mr. Mundar.. Most of the fellows to whom I have asked gave reply that I need not amend AOA.. I was in doubt because I have seen few co. amending AOA to incorporate power to reclassify but even on this CA Club, past reply for reclassification of shares states that only MOA needs to be amended. Hence I was confused.. Thank for clarifying my doubt and I can move forward with the process confidentaly.
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