Change in Share Capital

Change in Share Capital - Overview

The authorized capital is the amount of investment where the Company can go for an option to issue the shares to the shareholders. According to Section 2(8) of the Companies Act, 2013, the Authorised Capital limit is mentioned in the Capital Clause Of the Memorandum of Association of the company. At this point, the company has to take the necessary steps to Increase or to Change the authorized capital limit so that it can issue more shares. However, the company cannot grant shares exceeding the authorized limit at any point.

Characteristics of Change in Share Capital

Share Capital is a privilege to a predefined amount of the share capital, carrying with its specific rights and liabilities.
According to the Sale of Goods Act, 1930 – Goods implies any movable property other than exceptional cases, money and stock and shares.
Share Capital is distinguished by its number, even though this proviso will not have any substantial impact to a share amount held by a person whose name is enrolled as the owner of that particular share in the record of a depository
a share of any part in the company that is the movable property and it can be transferable in the way mentioned in the AOA of the Company

Different types of Change in Share Capital are

Increase in ’ Authorized ’ Share Capital
Combination and division all or any of the Share Capital into shares of bigger amount than existing Share
Convert all or any of its completely settled up shares into the stock and re-convert that stock into the completely settled up portions of any division
Sub-Division of its shares, into the portions
The reduction of shares.