Subdivision of Shares of a Private Limited Company

This query is : Resolved

ASGAR MEHDI SAIYED (Querist)
Follow

09 July 2010 Dear Sir,

Ours is a Private Limited co. I have 3 queries regarding that:

1) If AOA permits subdivision of shares, then whether it is required to file Form 23.

2) If in the above case Form23 is not required for subdivision, then also whether for Alteration of MOA/AOA filing of Form 23 is required.

3) Generally many Resolutions are passed by a Company, therefore whether it is mandatory to file Form 23 for each and every resolution passed or there are only some specific resolutions for which Form 23 is required to be filed.

Jagruti (CS)

Jagruti (CS) (Expert)
Follow

09 July 2010 Firstly, for subdivision Form 23 is not required to be filed but Form 5 need to be filed.

Secondly, for alteration of AOA yes Form 23 is required to be filed as it requires special Resolution for amendment but MoA depends on what changes you need to make.

And, following are cases when Company has to file Form 23 as per Seciton 192:

(a) special resolutions;

(b) resolutions which have been agreed to by all the members of a company, but which, if not so agreed to, would not have been effective for their purpose unless they had been passed as special resolutions;

(c) any resolution of the Board of directors of a company or agreement executed by a company, relating
to the appointment, re-appointment or renewal of the appointment, or variation of the terms of appointment, of a managing director;

(e) resolutions or agreements which have been agreed to by all the members of any class of shareholders but which, if not so agreed to, would not have been effective for their purpose unless they had been passed by some particular majority or otherwise in some particular manner; and all resolutions or agreements which effectively bind all the members of any class of shareholders though not agreed to by all those members;

(ee) resolutions passed by a company -
(i) according consent to the exercise by its Board of directors of any of the powers under clause (a), clause (c) and clause (d) of sub-section (1) of section 293;
(ii) approving the appointment of sole selling agents under section 294 or section 294AA;

(f) resolutions requiring a company to be wound up voluntarily passed in pursuance of subsection (1) of section 484; and

(g) copies of the terms and conditions of appointment of a sole selling agent appointed under section 294 or of a sole selling agent or other person appointed under section 294AA.

ASGAR MEHDI SAIYED

ASGAR MEHDI SAIYED (Querist)
Follow

09 July 2010 Thanks for making the 3rd point clear.

Regarding 1st and 2nd point, I apologise for complex language.

I want to know that in case Companies AOA permits subdivision of Shares then in that case whether it is sufficient to file only Form 5 or it is required to file Form 23 first and then Form 5.

Secondly, whether this point under capital clause in AOA (The Company in a General Meeting may alter the conditions of its memorandum of
Association in the manner specified in the Act.) permits subdivision of shares.

Upgrade to CAclubindia Pro. Subscribe Now!

Rasesh

Rasesh (Expert)
Follow

09 July 2010 The AOA permits sub-division. The members have to approve it at their agm/egm by way of an special resolution. This will require filing of Form 23 as well as Form 5.

Special Resolution has to be approved by members forthe sub-division of shares.

ASGAR MEHDI SAIYED

ASGAR MEHDI SAIYED (Querist)
Follow

09 July 2010 Thanks a lot for your kind advices.

Regards,

Saiyed