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Changes in Share Capital in Accordance with The Companies Act, 2013

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Main Changes in Company’s Share Capital | Shares at a Discount | Preference Shares for More Than 20 years | Private Placement, Bonus Shares and GDRs | Alteration of Share Capital | Consolidation and Division of Shares

difference between Companies Act 1956 and Companies Act 2013

Major Changes

  • Issue of Shares at a Discount

  • Issue of Preference Shares for More Than 20 years

  • Issue of Shares on Private Placement, Bonus Shares and GDRs

  • Notice of Alteration of Share Capital

  • Consolidation and Division of Shares

Changes regarding Share Capital

Issue of Shares at a Discount

The Companies Act, 1956

Issue of shares Permitted at discount subject to compliance with conditions under Section 79

The Companies Act, 2013

No shares, other than Sweat Equity Shares, Cannot be Issued at a Discount.

Issue of Preference Shares for More Than 20 years

The Companies Act, 1956

Prohibits the Issue of Irredeemable Preference Shares and Preference Shares Redeemable after 20 years.

The Companies Act, 2013

Preference shares have to be redeemed within 20 years of issue except for the shares issued for prescribed infrastructure projects, provided a certain percentage of shares are redeemed annually at the option of shareholders.

Issue of Shares on Private Placement, Bonus Shares and GDRs

The Companies Act, 1956

No Specific Provision for Issue of Shares on Private Placement, Bonus Shares and GDRs exist in the Present Act.

The Companies Act, 2013

Specific Provision Introduced for Issue of Shares on Private Placement, Bonus Shares GDRs in the Bill.

Notice of Alteration of Share Capital

The Companies Act, 1956

No notice of redemption of preference shares is required to be filed with ROC

 The Companies Act, 2013

A company  has to file a notice in the prescribed form with the Registrar Within a Period of 30 days of redemption of redeemable preference shares.

Changes regarding Share Capital

Consolidation and Division of Shares

The Companies Act, 1956

Company can merge or sub divide the shares by Passing Resolution in General Meeting

 The Companies Bill, 2013

Approval of the Tribunal has to be effective in merging and division of shares as it results in changes in the voting percentage of shareholders.

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