Shenoy Limited is a company with an authorized share capital of 20,00,000 equity shares of 100 each. At the Annual General Meeting (AGM), the…

According to section 61 (1) (d) of the Companies Act, 2013 (the Act), a limited company having a share capital may, if so authorised by its articles, alter its memorandum in its general meeting to 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. Section 64 of the Act states that a company shall, within 30 days of its share capital having been altered in the manner provided in section 61 (1) , give notice to the Registrar in the prescribed form along with an altered memorandum. In the given situation, shareholders of Shenoy Limited, in the AGM requested the company to reduce the face value of each share (from 100 to 10) and increase the number of shares than fixed by the memorandum (i.e. from 20 Lakh to 2 crore). According to the above provision, Shenoy Limited, having authorized capital of 20,00,000 equity shares (face value 100each) can reduce the face value of each share to 10 each and increase the shares to 2,00,00,000 [thereby keeping the total amount of authorized share capital to 20,00,00,000], if authorised by the articles of association. Hence, the request of the shareholders can be considered. The company has to alter its memorandum in its general meeting as per the procedure contained in section 13 of the Companies Act, 2013 and give notice to the Registrar along with an altered memorandum.