Section 61: Power of limited company to alter its share capital
This section allows a limited company to change its share capital in several ways, as long as its articles permit it.
The section, clause by clause
What the section says
In plain terms
(1)A limited company having a share capital may, if so authorised by its articles, alter its memorandum in its general meeting to—
A limited company with share capital can alter its memorandum at a general meeting to increase, consolidate, convert, sub-divide, or cancel its shares in various ways, including increasing its authorised share capital by any amount it chooses, consolidating and dividing shares into larger amounts, converting fully paid-up shares into stock, sub-dividing shares into smaller amounts, or cancelling unused shares.
(1)(a)increase its authorised share capital by such amount as it thinks expedient;
(1)(b)consolidate and divide all or any of its share capital into shares of a larger amount than its existing shares:
provisoProvided that no consolidation and division which results in changes in the voting percentage of shareholders shall take effect unless it is approved by the Tribunal on an application made in the prescribed manner;
(1)(c)convert all or any of its fully paid-up shares into stock, and reconvert that stock into fully paid- up shares of any denomination;
(1)(d)sub-divide its shares, or any of them, into shares of smaller amount than is fixed by the memorandum, so, however, that in the sub-division the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived;
(1)(e)cancel shares which, at the date of the passing of the resolution in that behalf, have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled.
(2)The cancellation of shares under sub-section (1) shall not be deemed to be a reduction of share capital.
Cancelling unused shares does not count as reducing the company's share capital.
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
Amendment notes
- 1. Sub-section (5) omitted by Act 29 of 2020, s. 10 (w.e.f. 21-12-2020).
Referred to by
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Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.