hemi (training) (25 Points)
05 February 2009
hemishp
(Company Secretary)
(32 Points)
Replied 08 February 2009
Cancellation of Shares is governed by Section 94 of the Companies Act, 1956. Cancellation of shares is called diminuition of capital and does not amount to reduction of capital under Section 100.
Procedure:-
1. Check if articles of the company authorise cancellation of unissued shares. If not special resolution at a general meeting of shareholders is required for authorising hte same.
2. At the same meeting an Ordinary Resolution of Shareholders at a general meeting is required for cancellation of unissued shares.
3. File Form 5 within 30 days of cancellation of shares as per Sec 95 of the companies act. File Form 23 if alteration of Articles with attchments of Notice and minutes of the meeting and alter AoA.
Need clarity on what you mean by creation of new shares.
Stamp duty is only required on increase of authorised capital. Stamp duty not required on cancellation of shares.
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