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CS Executive · Company Law and Practice · Share and Share Capital - Concepts

Kaveri Textiles Ltd, a public company with share capital, wants to increase its authorised share capital from ₹5 crore to ₹8 crore. Its articles contain no provision on alteration of share capital. Under Section 61 of the Companies Act, 2013, what is the position?

A limited company can increase authorised share capital through a general meeting resolution altering its memorandum, but only if its articles authorise this. Since Kaveri's articles are silent, it must first alter the articles. Board approval alone, or Tribunal or Registrar approval, is not the statutory route.

  1. AThe company can increase it by a general meeting resolution only if its articles authorise such alterationCorrect
  2. BThe company can increase it by a Board resolution alone, since the amount is below ₹10 crore
  3. CThe company can increase it only with prior approval of the Tribunal in every case
  4. DThe company can increase it only with prior approval of the Registrar

Explanation

Section 61(1) lets a limited company with share capital alter its memorandum in general meeting to increase authorised capital only if so authorised by its articles. Without such an article, the articles must first be altered. A Board resolution alone, Tribunal approval or Registrar approval is not the requirement.

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