Share Capital - Alteration of ‑ Creation of shares concurrently with cancellation of certain unissued share capital ‑ Whether amounts to increase in authorised capital and whether Form Nos. 5 and 6 are required to be filed - Companies Law - Letter No. 8/13(94)/59 - PR

Circular : Letter No. 8/13(94)/59 - PR, dated 12-2-1960. Subjects:- Share Capital - Alteration of ‑ Creation of shares concurrently with cancellation of certain unissued share capital ‑ Whether amounts to increase in authorised capital and whether Form Nos. 5 and 6 are required to be filed Query : A company passed two resolutions under clauses (e) and (a) respectively of sub‑section (1) of section 94 diminishing the authorised capital by the cancellation of a class of its unissued shares and creating at the same time in lieu thereof unclassified shares of the same denomination. No increase in the original authorised capital was thus effected. The question for consideration is whether the creation of such new shares, concurrently with the cancellation of certain unissued share capital of a company, should be deemed to be an increase in the authorised capital of the company over the reduced authorised capital (due to the cancellation of shares), and if so, whether the company should be called upon to pay registration fees therefor at the time of reporting the transactions in Form Nos. 5 and 6 of the Companies (Central Government s) General Rules and Forms. Answer : In such a transaction, so long as the original authorised capital, on which the company had already paid the prescribed fees under the Companies Act, is not exceeded, the company should not be called upon to pay any further fees. It would, however, be required to file both Form Nos. 5 and 6 to facilitate completion of the records of the Registrar.