Template Description
This board resolution for the Sub-Division of Shares provides a well-structured framework for companies seeking to split their existing equity shares into smaller denominations. It is a 2-page MS Word document and is tailored for use by companies, legal professionals, and company secretaries. The document is essential for ensuring compliance with the Companies Act, 2013, particularly Sections 61(1)(d) and 64(1)(a), along with relevant provisions.
Understanding the Board Resolution for Sub-Division of Shares
Terminologies:
Procedure for Sub-Division of Shares
Convene a Board Meeting: Schedule a meeting of the Board of Directors and Conduct the meeting at the company’s registered office.
Approval of Sub-Division of Shares:
Pass the resolution to approve the sub-division of shares, defining the new face value.
Ensure that the resolution is in accordance with the company's Articles of Association and statutory requirements.
Record Date:
The board is authorized to decide on a Record Date after receiving shareholder approval.
The Record Date marks the day the new sub-divided shares take effect.
Impact on Share Capital:
Reflect changes in both the Authorized and Issued, Subscribed, and Paid-Up Share Capital.
Document the pre- and post-sub-division share structure in the resolution.
Shareholder Approval: Ensure that the sub-division is subject to shareholder approval during the company’s general meeting.
Compliance with Regulatory Framework: Ensure that the company follows statutory compliance as per the Companies Act, 2013, and related guidelines.
Conclusion
The Board Resolution for Sub-Division of Shares formalizes the decision to split the company’s equity shares, enhancing liquidity and making shares more accessible to smaller investors. Proper documentation and shareholder approval are essential to ensure the smooth execution of the sub-division process, in line with the regulatory framework.