At the Board Meeting, pass a Board Resolution to call for an Extraordinary General Meeting and issue notice pursuant to the provision of Section 101 of the Act, where the altered clause on authorised capital in the Memorandum of Association can be presented for approval by passing an Ordinary Resolution.
Company can increase its authorized share capital, only if it is authorized by its Articles of Association and after obtaining approval of members by ordinary resolution.
Alteration of share capital can be done by issuing new shares of the company in the market, by consolidating the shares, the company can do the alteration in its capital by the conversion of previous shares, the company can subdivide its share in the market, the company can cancel its unused shares from the market.
In order to remove this provision (which by virtue of section 28 of the Companies Act 2006 is automatically deemed to form part of the company’s articles of association rather than its memorandum), the company must pass an ordinary resolution of the shareholders.
Yes Authorized share capital can be reduced, this is known as Diminution. Diminution of capital (i.e. share capital) of a Company means reduction of the share capital by cancellation of the unsubscribed part of the issued capital.
As per Section 66 of Companies Act of 2013, there are almost three ways of reducing share capital for a company limited by shares or guarantee, subject to such confirmation from the Tribunal: firstly reducing or extinguishing liability on such unpaid shares of the company, secondly either with or without extinguishing …
(a) Increase of authorized share capital;. (b) Consolidation and division all or any of share capital into shares of a larger amount than existing shares (consolidation and division which results in changes in the voting percentage of shareholders shall require the approval of NCLT);.
Alteration of Share Capital refers to the changes in the existing capital structure of the firm. A company can alter its share capital only if it is authorized by its Articles of Association. An article of association is the document framed at the time of incorporation of the company to govern its internal affairs.
From 1 October 2009, directors of companies who are generally authorised by their shareholders to allot shares will be given the power to allot shares pursuant to that authority as if such pre-emption rights did not apply, if authorised to do so by their articles or by special resolution.
The key difference between allotment and issue of shares is that an allotment is a method of share distribution in a company whereas share issue is the offering of the ownership of the shares to shareholders to hold, and later transfer to another investor.
Incorporator.com.au – New companies no longer have a nominal authorised share capital unissued shares. Under previous Australian company law, Australian companies used to have what was variously called ‘nominal’ or ‘authorised’ share capital.
Authorised Share Capital
- It is the maximum amount of the capital for which shares can be issued by the Company to shareholders.
- The Authorised capital is mentioned in the Memorandum of Association of the Company under the heading of “Capital Clause”.
Authorized share capital is the maximum extent of funding that can be raised through issue of shares. It is laid out in the company’s charter documents. Issued and paid up share capital is the part of authorized share capital against which shares have been issued to share holders of a company against full payment.
Authorized share capital—also known as “authorized stock,” “authorized shares,” or “authorized capital stock”—refers to the maximum number of shares a company is legally allowed to issue or offer based on its corporate charter. … A company’s authorized share capital will not increase without shareholder approval.