Ad Free CAclubindia and Daily Updates on your Mobile. Subscribe Now!

Authorised Capital

Bimal Thacker (Proprietor) (762 Points)

27 November 2010

One of my client is having following share capital:
Authorised capital: 10,00,000 equity shares of Rs. 10 each = Rs. 1 crore and 15,00,000 Preference share of Rs. 10 each = Rs. 1.5 crore total authorised capital is 2.5 crore.
Paid up captal as on 31.3.2010 is 10,00,000 eq. shares of Rs. 10 each = Rs. 1 crore.

They wants to issue bonus share 1:1 i.e.10,00,000 eq. share Rs. 1 crore.

Whether authorised capital is required to increased ? or Preference share as redem in 2009 and no intention to issue in future the authorised capital can be adjusted and no more to increased.

also procedure if the same can be adjusted

Reply
Follow
Share

1 Replies

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 29 November 2010

Dear Bimal Ji,

First of all, conversion of share capital is very much possible. You just need to cancell the one type of share capital and in lieu of the same creation of new shares... No fees shaal be envolved in this matter. Just change the MOA by way of passing the ordinary resolution in the general meeting.

Secondly, in your case last year you have redeemed preference shares and now you want to issue bonus shares. You can also converty your preference share capital into equity share capital.

But , in my opinion, you should increase your authorised share capital and then go for the same.