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Reduction of Share Capital

Malav Shah (Company Secretary and AVP Legal) (171 Points)

17 April 2010

Can anyone provide checklist/ procedure for reduction of share capital.

Regards

Malav Shah

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CS Jithesh (ACS,) (COMPANY SECRETARY ) (485 Points)
Replied 17 April 2010

1.AoA has to authorise for the rediuction of Share capital, if not alter the AoA by special resolution in an EGM 2.The redustion should be in accordance with Sec 100 of comapnies Act 1956 in any following modes - by extinguishing or reducing the liability on any of its shares in respect of share capital not paid up by cancelling any paid up capital which is lost or is unrepresented by available assets by paying off any paid up capital which is in excess of the wants of the company Steps 1.Call a EGM and pass the resolution as special resolution 2.File Form No 23 for registration of Special resolutions 3.A petition has to be filed with High court and such petition should ebaccombanied by summons for directiion . 4.The petition should also be accombanied by the Affidavit. 5.The petition should accompany, Moa AoA, Notice, minutes, Special resolution and explanatory statement, B/s and P&L along with requisite court fee. 6.Make advetisment in news paper atleast 14 days before hearing in english daily and in regional language. 7.Once the judge is satisfied that the reduction will not affect or diminise any liability inrespect of unpaid. 8.The Judge after satisfying himself will passs the order for reduction. 9.Once the order has come the same has to be intimated to RoC in Form 21 with in 30 days. 10.After that the copis of order has to be send to RoC in physical form . 11.Then alter the MoA and AOA wherever required by passing special resolution and file form 23 with in 30 days. These are the main steps for reduction of capital u/s 100