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CMA Final · Corporate and Economic Laws · Company Formation and Conversion

Vindhya Ltd, an unlimited company with share capital, passes a resolution for registration as a limited company. Which step is permitted by the resolution under the Act?

The resolution may provide that a specified portion of the uncalled share capital cannot be called up except in the event and for the purposes of winding up. It may also increase the nominal amount of shares on the same condition, creating reserve capital.

  1. AProviding that a specified portion of its uncalled share capital shall not be capable of being called up except in the event and for the purposes of winding upCorrect
  2. BReducing the nominal value of each share so that creditors' claims are extinguished
  3. CMaking the whole increased capital callable at any time by the Board
  4. DCancelling its uncalled capital with immediate effect without any condition

Explanation

Section 65 allows the resolution to increase the nominal amount of shares, or to provide that a specified portion of uncalled capital cannot be called up except on winding up. Any increased capital also cannot be called up except on winding up. The other options are not provided for there.

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