Consolidation of share capital and division of consolidated share capital into shares of smaller denomination - Companies Law - Letter : No. 40/3/71‑CL‑III,

Letter : No. 40/3/71 ‑ CL ‑ III, dated 21 ‑ 7 ‑ 1975. Subject:- Consolidation of share capital and division of consolidated share capital into shares of smaller denomination The Department is of the view that the consolidation of the equity share capital and the redeemable preference share capital and the division of the consolidated share capital into equity shares of lesser amount, i.e., Rs. 10 each is not covered under clause (b) of sub‑section (1) of section 94 since the consolidation and division of share capital into shares of small denominations are not covered thereby. In the circumstances, there is no need for Form No. 5 or Form No. 6. The company should, however, move the court under section 391 since a reorganisation of share capital will be an arrangement under section 390(b). The change in the share capital can be given effect to in the balance sheets only after its confirmation by the High Court under section 391 and any further increase in the authorised capital of the company can be effected thereafter.