An increase, reduction, or any other change in the authorized capital of a company (see share capital). If permitted by the articles of association, a limited company can increase its authorized capital as appropriate.
Alteration is much wider term than Reduction, since Alteration may be increase or decrease or cancellation in share capital, but Reduction is a much restricted phenomena wherein the only consequence that needs to be achieved here is overall decrease in Share Capital. 2.
What is the Procedure followed for Alteration in Share Capital?
- Issue a Board notice with the agenda of the meeting at least 7 days before the date of the meeting.
- Hold a Board Meeting.
- Pass the Resolution for the Alteration of Share Capital in the Board meeting.
What is meant by alteration of capital in company law?
Alteration of Capital can be done by way of increasing authorized and paid capital of a company. An increase in capital is required for issuing new shares and inducting more capital into the company. … Therefore, it is mandatory to comply the provision of Act in each and every aspect.
Diminution of capital means the CANCELLATION of UNSUBSCRIBED part of ISSUED CAPITAL. There should be authorization in ARTICLES of the company and it can be effected by passing OR. Diminution is different from reduction of share capital. Hence, it is the cancellation of the issued capital which is unsubscribed.
Consolidation of shares is a process by which a company limited by shares may change the structure of its share capital by reducing the number of shares it has in issue and increasing the nominal value of each share. On a consolidation, the total nominal value of the company’s issued share capital remains unchanged.
Sub-division of shares.
Consolidation and division of share into shares of larger value. However, such consolidation and division shall not impact the voting percentage of shareholders. In case it does then the approval of NCLT will be required; c.