Procedure For Consolidation of Share Capital

     

Procedure For Consolidation of Share Capital

For consolidation of share capital, a company is required to take the following procedural steps:

    1.    It must ensure that its articles of association contain a clause, authorizing it to consolidate its shares. If there is no such provision, the articles should be first altered in accordance with the provisions of Section 14 of the Companies Act, 2013.

    2.     Give twenty-one clear days’ notice of the proposed consolidation of the shares of the company to the stock exchanges where the securities of the company are listed.

    3.    Make an application to the stock exchanges whrere the securities of the company are listed and any other stock exchange where company proposes for getting its consolidated shares listed.

4.    Convene and hold a Board meeting to –

·         Pass a resolution approving the proposed consolidation of the shares of the company;

·          Fix time, date and venue for holding a general meeting of the company to pass a special resolution, if so required by the articles for this purpose [Section 13 (1)];

·       Approve notice, agenda and explanatory statement to be annexed to the notice of the general meeting as per Section 101 and 102 of the Act;

·        Authorise the company secretary or some other competent officer to issue, on behalf of the Board, notice of the general meeting as approved by the Board.

5.    In the case of a listed company, soon after the conclusion of the Board meeting, send to the stock exchanges, where the securities of the company are listed, particulars of such alteration of share capital of the company.

6.   Issue notice of the general meeting along with the explanatory statement, to all members, directors and auditors of the company.

7.   In the case of a listed company, forward three copies of the notice of the general meeting along with the explanatory statement, to the concerned stock exchanges.

8.   Hold the general meeting and have the resolution (ordinary or special, as the case may be) passed.

9.   In the case of a listed company, forward a copy of the proceedings of the general meeting to the concerned stock exchanges. [Clause 31 of the Listing Agreement]

10. File with the ROC, Form MGT – 14 along with a certified copy of the resolution, notice and the explanatory statement annexed to the notice of the general meeting at which the resolution was passed and copy of altered Memorandum of Association and Articles of Association, within thirty days of the passing of the resolution.

11. Give notice in compliance with the provisions of section 64 of the Companies Act, 2013, of the consolidation of the shares of the company, to the Registrar in Form SH – 7, within thirty days of the passing of the resolution, along with the prescribed filing fee specifying the shares consolidated. The Registrar will record the alteration in the memorandum of the company.

12.  In the case of a listed company, forward to the concerned stock exchanges copies of all the notices sent by the company to its members with respect to the alteration of the conditions in the memorandum of association and six copies (one of which must be certified) of such amendments to the memorandum of association as soon as they are adopted by the company in general meeting, as per the Listing Agreements signed with the stock exchanges.

Related Post :

Ordinary Resolution For Consolidation of Shares

Ordinary Resolution For Subdivision of Shares

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