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2022 (6) TMI 502 - Tri - Companies LawReduction of share capital - Section 66 of the Companies Act, 2013 - HELD THAT - This Tribunal is of the view that it is just and proper to confirm the Reduction of Share capital of the Applicant Company as resolved by the members of the Company by passing a special resolution and by way of the consents in the form of affidavit. This Tribunal also approves the proposed form of Minutes to be registered under section 66(5) of the Companies Act, 2013. While approving the Reduction of share capital, it is clarified that this order should not be construed as an order in any way granting exemption from payment of stamp duty, taxes or any other charges, if any payment is due or required in accordance with law or in respect to any permission/compliance with any other requirement which may be specifically required under any law - Application allowed.
Issues:
Application under Section 66 of the Companies Act, 2013 for confirming reduction of share capital of a company. Analysis: 1. The application was filed for confirming the reduction of share capital of a company incorporated under the Companies Act, 1956. The company sought reduction due to significant accumulated losses and insufficient reserves to set off the losses against the paid-up capital. 2. The authorized share capital of the company and the issued subscribed and paid-up capital were detailed in the application, showing the need for reduction to address the loss situation. 3. The Articles of Association of the company allowed for the reduction of share capital by special resolution, as per the provisions of the Companies Act, 2013. 4. The company presented certificates from chartered accountants confirming the proposed reduction of share capital conformed to accounting standards under the Companies Act, 2013. 5. Shareholders passed a special resolution for the reduction of capital in an Extraordinary General Meeting, detailing the proposed reduction and the method to be followed. 6. The company submitted a proposed form of minutes to be registered under section 66(5) of the Companies Act, 2013, reflecting the reduced share capital structure. 7. The company complied with the Tribunal's directions to notify the Ministry of Corporate Affairs and publish notices in newspapers, with the Regional Director subsequently expressing no objections to the reduction scheme. 8. The Tribunal, after reviewing the application, shareholder approval, compliance with procedures, and the Regional Director's report, found it just and proper to confirm the reduction of share capital as proposed. 9. The Tribunal clarified that the approval did not exempt the company from any statutory obligations, taxes, or charges, emphasizing the need for compliance with SEBI, FEMA, and Income Tax laws post-approval. 10. The Tribunal warned that any deficiencies or violations found post-approval could lead to actions against the concerned persons, directors, or officials of the company, albeit in accordance with the law. 11. The application was allowed, confirming the reduction of share capital as per the proposed scheme and resolutions passed by the company.
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