STEPS OF RECLASSIFICATION OF AUTHORIZE CAPITAL (Section- 13 & 61)
There are two way of Reclassification in Authorize Capital:
1) If there is no requirement to Alteration in Article of Association.
2) If there is require to Alter Article of Association.
1) If there is No requirement of Alteration in Article of Association
First Check is there any provisions in Article of Association regarding reclassification in capital, if there is provision in AOA then no need for alteration in Article of Association.
STEP: I
Call Meeting of Board Director:
i. Issue Notice of Board Meeting to all the directors of company at least 7 days before the date of Board Meeting.
ii. Attach Agenda of Board Meeting along with Notice.
STEP: II
Hold the Board Meeting:
At the Board meeting, the given resolutions must be passed:-
i. Get Approval to Reclassification in the authorized capital and recommending the proposal for members' consideration by way of ordinary resolution.
ii. Fixing the date, time, and venue of the general meeting and authorizing a director or any other person to send the notice for the same to the members.
iii. Approval of Notice of EGM.
iv. Provisions of the Section 101 of the Companies Act 2013 provides for issue of notice of EGM in writing to below mentions atleast 21 days before the actual date of the EGM :
- All the Directors.
- Members
- Auditors of Company
v. The notice shall specify the place, date, day and time of the meeting and contain a statement on the business to be transacted at the EGM.
vi. Authorize Director & Company Secretary of company to issue notice of EGM.
STEP-III
Hold Extra Ordinary general Meeting:
i. Check the Quorum.
ii. Check whether auditor is present, if not. Then Leave of absence is Granted or Not. (As per Section- 146).
iii. Pass the Ordinary Resolution (u/s- 61(1)(a) of the companies act, 2013) for change in Capital Clause of Memorandum of Association of Company.
iv. Approval of Alteration in MOA & AOA.
STEP-IV
FILING AND FEES:
I) File FORM NO. SH-7 within 30 days of passing the Ordinary resolution, along with given documents:-
- Certified True Copies of the Ordinary Resolutions along with explanatory statement;
- Copy of the Notice of meeting send to members along with all the annexure;
- A printed copy of the Altered Memorandum of Association and Article of Association.
- Minutes of General Meeting.
STEP-V
Concerned Registrar of Companies (ROC) will check the E-form and attached the documents and will approve the reclassification in Authorize capital of company.
2. If there is requirement of Alteration in Article of Association
First Check is there any provisions in Article of Association regarding reclassification in capital, if there is no provision in AOA then first requires alteration in Article of Association.
STEP: I
CALL BOARD MEETING:
i. To Alter the Clause in Article of Association of Company for Reclassification in Authorize Capital of Company.
ii. To alter the Capital clause in memorandum of association of Company By giving Notice of at least 7 days.
STEP: II
CALL BOARD MEETING
At the Board meeting, the given resolutions must be passed:-
i. Get Approval for alteration in Article of Association
ii. Get Approval to Reclassification in the authorized capital and recommending the proposal for members' consideration by way of ordinary resolution.
iii. Fixing the date, time, and venue of the general meeting and authorizing a director or any other person to send the notice for the same to the members.
iv. Provisions of the Section 101 of the Companies Act 2013 provides for issue of notice of EGM in writing to below mentions at least 21 days before the actual date of the EGM :
- All the Directors.
- Members
- Auditors of Company
v. The notice shall specify the place, date, day and time of the meeting and contain a statement on the business to be transacted at the EGM.
STEP-III
HOLD A GENERAL MEETING:
i. Check the Quorum.
ii. Check whether auditor is present, if not. Then Leave of absence is Granted or Not. (As per Section- 146).
iii. Pass the Special Resolution for change in Capital Clause of Article of Association and Memorandum of Association of Company.
iv. Approval of Alteration in MOA & AOA.
STEP-IV
FILING AND FEES:
I) File FORM NO. MGT-14 (Filing of Resolutions and agreements to the Registrar under section 117) with the Registrar along with the requisite filing within 30 days of passing the special resolution, along with given documents:-
- Certified True Copies of the Special Resolutions along with explanatory statement;
- Copy of the Notice of meeting send to members along with all the annexure;
- A printed copy of the Altered Article of Association and Memorandum of Association.
2) File FORM NO. SH-7 (Section-64(1) read with Rule 15 of The Companies (Share Capital and Debentures) Rules, 2014 )within 30 days of passing the Ordinary resolution, along with given documents:-
- Certified True Copies of the Ordinary Resolutions along with explanatory statement;
- Copy of the Notice of meeting send to members along with all the annexure;
- A printed copy of the Altered Memorandum of Association and Article of Association.
- Minutes of General Meeting.
STEP-V
Concerned Registrar of Companies (ROC) will check the E-form and attached the documents and will approve the reclassification in Authorize capital of company.
Draft Special Resolution:
To consider and, if thought fit, to pass with or without modification, if any, the following Resolution as an Ordinary Resolution:
“RESOLVED THAT pursuant to the provisions of Sections 16 and 94 of the Companies Act, 1956 and other applicable provisions, if any, of the Companies Act, 1956, as amended (without reference to the provisions thereof that have ceased to have effect upon notification of sections of the Companies Act, 2013), Sections 13 and 61 and other applicable provisions of the Companies Act, 2013, to the extent notified and in effect, (the “Companies Act”) and subject to the approval of the shareholders of the Company, the authorized share capital of the Company comprising of ` 2,000,000,000 divided into 1,000,000,000 Equity Shares of ` 1 each and 10,000,000 cumulative redeemable preference shares of `100 each be and is hereby reclassified into 2,000,000,000 equity shares of ` 1 each aggregating to ` 2,000,000,000 with power to reclassification, reduce, divide and/or sub-divide the share capital of the Company or reclassify them into several classes and attach thereto respectively such preferential, priority, deferred, qualified or special rights, privileges, conditions or restrictions, whether in regard to dividend, voting, return of capital, distribution of assets or otherwise, as may be determined in accordance with the laws, rules and regulations from time to time and to vary, modify or abrogate such rights, privileges, conditions or restrictions in such manner as may from time to time be provided by the regulations/ resolutions of the Company or are provided for in the Articles of Association of the Company and to consolidate or sub-divide or reorganize shares or issue shares of higher or lower denominations;
RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, any of the Directors of the Company or the Company Secretary be and are hereby authorized severally to take all such steps and actions and give such directions as they may in their absolute discretion deem necessary and to settle any question that may arise in this regard, without being required to seek any further consent or approval of the Members or otherwise to the end and intent that the Members shall be deemed to have given their approval thereto expressly by authority of this resolution.”
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