Quick Summary:
Feeling Lost?
Have questions or need help? Reach out to us via email or phone. We're here to assist you!
Understand the complete procedure for change in share capital including board resolutions, shareholder approvals, types of changes (increase, decrease, reclassification), and ROC filing in India.
5 May 2024
Afinthrive Advisory
Change in share capital refers to the modification of a company’s existing capital structure by increasing, reducing, or reclassifying its shares. This is typically done to accommodate business needs such as raising funds, issuing bonus shares, or restructuring ownership.
Companies may alter their share capital through rights issues, private placements, buybacks, consolidation, or subdivision of shares. Each change must comply with the provisions of the Companies Act, 2013, and the Articles of Association of the company.
Common reasons for changing share capital include:
The process generally involves passing a board resolution, obtaining shareholder approval via a special resolution, filing relevant forms with the Registrar of Companies (ROC), and updating statutory registers. Depending on the type of change, a valuation report, auditor’s certificate, or shareholder agreement may also be required.
How Afinthrive advisory can assist?
Afinthrive advisory helps companies navigate the procedural and legal aspects of changing their share capital. From drafting resolutions and filing necessary ROC forms to providing compliance guidance and regulatory updates, we ensure that your capital restructuring is smooth, compliant, and aligned with your business goals.
You won’t get the services at this unbeatable price range anywhere in India.
Essential
₹2499
(20%)
₹
1999
Plan inclusive of all charges
KEY FEATURES
Prime
₹3999
(20%)
₹
3199
Plan inclusive of all charges
KEY FEATURES
Elite
₹5999
(17%)
₹
4999
Plan inclusive of all charges
KEY FEATURES
A detailed overview of procedural, legal, and strategic aspects involved in modifying a company's share capital structure.
Types of Share Capital Changes
Share capital can be increased by issuing new shares, reduced through buy-back or capital reduction, or restructured by reclassification or conversion of shares into other types.
Board and Shareholder Approval
Any modification to the share capital requires a resolution passed by the board of directors and a special resolution approved by the shareholders in a general meeting.
Mandatory ROC Filings
Statutory forms such as SH-7 (for increase) and MGT-14 (for special resolutions) must be filed with the Registrar of Companies to validate the change legally.
Compliance with Legal Framework
All changes must comply with the Companies Act, 2013 and relevant SEBI or RBI guidelines, ensuring that the process is transparent and legally enforceable.
Effect on Ownership and Control
Altering share capital can dilute existing ownership, change voting rights, or impact dividend distribution, thereby influencing control and financial dynamics within the company.
Get Answers to your most asked questions.
A change in share capital refers to any alteration in a company's authorized, issued, or paid-up share capital. This can include increasing or decreasing share capital, issuing new shares, or consolidating/splitting existing shares.
Shareholder approval is typically required through a special resolution passed at a general meeting, especially for increasing authorized capital or issuing new shares.
Companies usually increase share capital to raise additional funds, bring in new investors, or meet expansion needs.
Yes, a company can reduce its share capital subject to compliance with legal procedures, often requiring approval from the shareholders and the tribunal.
Yes, any change in share capital must be reported to the Registrar of Companies (ROC) by filing the appropriate forms, such as SH-7 for increase in authorized capital.
Additional share capital can be issued via rights issue, bonus issue, private placement, or preferential allotment, depending on the company’s needs and shareholder agreements.
Authorized share capital is the maximum amount of share capital that a company is legally allowed to issue to shareholders, as stated in its Memorandum of Association.
Yes, issuing new shares can dilute the ownership percentage of existing shareholders unless they participate in the issuance proportionally.
Common documents include a board resolution, special resolution, altered MOA (if applicable), and ROC filing forms like MGT-14 or SH-7.
In general, government approval is not required, but filings with the ROC and adherence to Companies Act, 2013 regulations are mandatory.
