Change In Share Capital

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What Share Capital Means?

Share CapitalTODAYFILINGS
The company's "Share Capital," which is the sum divided into a predetermined number of shares or a predetermined amount of shares. To continue operating, any company needs cash in the form of share capital. The business uses cash to carry out its essential operations to gain in commercial real estate, inventory, and other assets.
Present Approved Share Capital must be checked first if it decides to increase its Capital. It's because, in order to issue the shares, the Company must raise the approved share capital by amending the MOA. The Company is not permitted to grant shares beyond the authorized share capital in any way.
If approved by the Articles of Association, the Company that owns Share Capital may change its Share Capital. The Companies Act of 2013 mandates that the Company adhere to certain procedures. It is necessary to seek approval by submitting the necessary papers before the company's share capital is increased or changed.

Procedure for change share capital

Method to Modify Authorized Capital
Share capital change step by step procedures are,
Read the Articles of Association carefully
Board meeting will be held.
Extraordinary General Meeting's
The issue of the increase in share capital is brought forward following the meeting. The voting procedure is then carried out according to a predetermined procedure to bring the share capital issue to a close.
Following approval and authorization of the resolution, the explanatory report is attached and the share capital is increased.
Filing with the Registrar of Companies
A corporation must submit eForm SH-7 and eForm MGT - 14 (if applicable), along with all required paperwork and the required fees, to the Registrar within 30 days of the resolution's approval.
Form MGT – 14:
Within 30 days of the increase in share capital resolution's passage, this form must be presented to the RoC.
Form SH – 7:
The main goal of this form is to provide suggestions to the Registrar on information about the company's increase in authorized capital. According to the RoC within 30 days, the forms must be submitted within the allotted time frame to avoid penalties or further penalty.

Documents Required for Share Capital Changes

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Copy of the resolution approved at the associated with Modified AOA general meeting.
Certificate as evidence of new capital arrangement and newly introduced class of shares that has been combined or divided.
Copies of the last three years' worth of audited balance sheets and bank payment of the request fee. .
Issuance copy of the Board's decision to modify the AOA and MOA.
Authenticating legal papers for the petition and true legal document of the shareholders.
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Characteristics of Share Capital Change

Sale of Goods Act, 1930
According to the Sale of Goods Act of 1930, "goods" refers to any transportable property that is not cash, stock, or other exceptional instances.
The term "share capital" refers to the sole ownership of a predetermined amount of share capital, holding with a set of distinct rights and financial obligations.
Additionally, any share of a corporation that is movable property and is transferrable in the manner specified in the company's AOA.
Companies Act, 2013
The Companies Act of 2013's Section 61 outlines the various types of Change in Share Capital and their relationships.
Combining and dividing the entire share capital into shares with larger nominal values than the current shares.
Convert all or a portion of the company's fully paid-up shares into stock, and then convert that stock back into any division's fully paid-up portions.
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Frequently Asked Questions

Modification of the number of shares corresponds to a change in the share capital.

A firm can increase its share capital by issuing the Right Issue of shares if it wants to do so. After the organization has passed a special resolution, the right Issue may be made available to current promoters or investors under a plan of employers' investment opportunity.

rise or shift in Share The structure of an organization must be changed, and capital is crucial. Redesigning or restyling capital may involve changing the share capital. Shares may be combined to accomplish this, or the par value of the shares may be lowered.

Business can raise funds from the main market using a number of strategies. Some of them encourage tender processes, right Issues, private placements, offers for sale, and public issues.

Company may use its share premium account or capital redemption reserve to fund a business issue of fully or partially paid-up bonus shares in proportion to their existing shareholdings, if permitted by its articles of incorporation or AOA.

The authorized share capital of the Company is mentioned in Clause V of the MOA.

Form MGT 14 and SH 7 are required to be filed with the Registrar within 30 days from the date of passing the resolution for the increase in authorized share capital.

Verify the AOA Convene Board meeting Extraordinary general meeting File ROC forms Allotment of shares.

A company is required to increase the authorized share capital before issuing the new equity shares and increasing the paid-up capital. The Authorised share capital is the total value of the shares a company can issue.

Private Limited Companies are required to have a minimum authorized share capital of Rs.1 lakh and Rs.5 lakh for public limited companies

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