Template Description:

This board resolution template, titled "AGM Resolution – Sub-Division of Equity Share Capital," is a comprehensive document designed for Private Limited Companies that need to formalize the process of sub-dividing their equity share capital. This is 2-page MS Word document tailored to comply with the Companies Act, 2013. It is intended for use by companies, legal professionals, and stakeholders involved in corporate governance.

Understanding the AGM Resolution for Sub-Division of Equity Shares

What is Sub-Division?

The process of splitting existing equity shares into multiple shares, thus adjusting the face value while maintaining the total capital.

Conditions for the sub-division of equity share capital

Approval Requirements:

• Board Resolution: The sub-division must be approved by a resolution of the board of directors.
• Shareholder Approval: A special resolution must be passed at a general meeting of the shareholders. This resolution needs to comply with the provisions of Sections 61(1)(d) and 64(1)(a) of the Companies Act, 2013.

Documentation and Filing:

• Record Date: The board must set a record date for the sub-division, which is the date on which the list of shareholders will be finalized.
• Share Certificates: Existing share certificates need to be called back and cancelled. New certificates reflecting the revised face value must be issued.
• Filing with Registrar: The Company must file a return with the Registrar of Companies (ROC) regarding the sub-division of shares.

Capital Adjustment:

• Authorised Capital: The authorized share capital must be adjusted to reflect the new face value of shares.
• Issued and Paid-Up Capital: The issued, subscribed, and paid-up capital should be updated in the company's records to show the new number of shares and their face value.

4.   Compliance with Rules:

• ·Companies (Share Capital and Debentures) Rules, 2014: The procedure must comply with the rules stipulated under these regulations, ensuring all legal requirements are met.

Conclusion

The sub-division of equity share capital allows companies to adjust their share capital structure to make shares more affordable and increase liquidity. This process is crucial for companies looking to enhance shareholder engagement and comply with regulatory requirements. The resolution template provided ensures that all necessary steps are followed and documented properly, aiding in a smooth transition and compliance with legal standards.