Change in Paid Up Share Capital

Overview

The paid-up share capital of the company can be increased by issue of new shares or by calling unpaid amount of shares from the shareholders of the company. A company can issue shares through public offer or by private placement.

WAYS TO ISSUE SHARE CAPITAL

A company can issue securities in any of the following ways:

• By public offer of shares through prospectus.
• By private placement of shares.
• By right issue or bonus issue of shares.

PROCEDURE FOR ISSUE OF SHARE CAPITAL

• STEP 1 - Check authority : Check that the articles authorise the company to issue share capital, in case it is mandatory as per the Companies Act, 2013.
• STEP 2 - Convene Board Meeting : Meeting of Board of Directors of the company is to be conducted to pass resolution for:
  • Approving the proposed changes in the share capital of the company.
  • Approving notice of general meeting and fixing time, date and venue of the general meeting for passing resolution.
  • Authorising person to issue notice of general meeting on behalf of the board.
• STEP 3 - Hold General Meeting : The general meeting of the company should be hold after giving 21 days clear notice to the members for passing resolution to issue shares of the company.
• STEP-4: Allotment of securities : The Company shall after receiving application make an allotment of shares within 60 days of receipt of application.
• STEP-5: Filing with Registrar: Within 30 days of allotment of shares by the company it is required to file form PAS-3 with the registrar along with the full details of the allottees.

TYPES OF SHARE CAPITAL

There are two types of share capital as mentioned below:

• 1. Equity Share Capital
  a. With voting rights
  b. With differential rights
• 2. Preference Share Capital

FORMS TO BE FILED

• PAS-3: filing of Return of Allotment of shares by the company to ROC.
• MGT-14: filing of special resolution with the Registrar by the company (in case company is required to pass special resolution).

PARTICULARS OF ALLOTTEES TO BE FILED WITH REGISTRAR

Following particulars of allottees is required to be filed with the Registrar:

• Personal details of the allottees such as name, E-mail ID, PAN number.
• Date of allotment of shares.
• Type of shares allotted.
• Number and total value of shares held.