Indian Bare Acts

Search Alphabatically :

The Companies Act, 1956

Title : The Companies Act, 1956

Year : 1956

Section 96 - Effect of conversion of shares into stock

Where a company having a share capital has converted any of its shares into stock, and given notice of the conversion to the Registrar, all the provisions of this Act which are applicable to shares only, shall cease to reply as to so much of the share capital as is converted into stock.
________________________________________
Section 97 - Notice of increase of share capital or of members
________________________________________
 
(1) Where a company having a share capital, whether its shares have or have not been converted into stock, has increased its share capital beyond the authorised capital, and where a company, not being a company limited by shares, has increased the number of its members beyond the registered number, it shall file with the Registrar, notice of the increase of capital or of members within1[thirty] days after the passing of the resolution authorising the increase; and the Registrar shall record the increase and also make any alterations which may be necessary in the company's memorandum or articles or both.
(2) The notice to be given as aforesaid shall include particulars of the classes of shares affected and the conditions, if any, subject to which the new shares have been or are to be issued.
(3) If default is made in complying with this section, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to2[five hundred rupees] for every day during which the default continues.
 

________________________
1 . Substituted by Act 31 of 1965, Section 62 and Schedule, for "fifteen" (w.e.f. 15-10-1965).
2 . Substituted by Act 53 of 2000, Section 42, for "fifty rupees" (w.e.f. 13-12-2000).
________________________________________
Section 98 - Power of unlimited company to provide for reserve share capital on registration
________________________________________
 
An unlimited company having a share capital may, by its resolution for registration as a limited company in pursuance of this Act, do either or both of the following things, namely: —
(a) increase the nominal amount of its share capital by increasing the nominal amount of each of its shares but subject to the condition that no part of the increased capital shall be capable of being called up except in the event and for the purposes of the company being wound up;
(b) provide 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 the company being wound up.

 
________________________________________
Section 99 - Reserve liability of limited company
________________________________________
 
A limited company may, by special resolution, determine that any portion of its share capital which has no! been already called up shall not be capable of being called up, except in the event and for the purposes of the company being wound up, and thereupon that portion of its share capital shall not be capable of being called up except in that event and for those purposes.

________________________________________
Section 100 - Special resolution for reduction of share capital
________________________________________
 
(1) Subject to confirmation by the1[Tribunal], a company limited by shares or a company limited by guarantee and having a share capital, may, if so authorised by its articles, by special resolution, reduce its share capital in any way; and in particular and without prejudice to the generality of the foregoing power, may -
(a) extinguish or reduce the liability on any of its shares in respect of share capital not paid up;
(b) either with or without extinguishing or reducing liability on any of its shares cancel any paid-up share capital which is lost, or unrepresented by available assets; or
(c) either with or without extinguishing or reducing liability on any of its shares, pay off any paid-up share capital which is in excess of the wants of the company; and may, if and so far as is necessary, alter its memorandum by reducing the amount of its share capital and of its shares accordingly.
(2) A special resolution under this section is in this Act referred to as "a resolution for reducing share capital".
 

________________________
1. Substituted by Act 11 of 2003, Section 14, for "Court".
________________________________________
Section 101 - Application to court for confirming order, objections by creditors, and settlement of list of objecting creditors
________________________________________
 
101. Application to1[Tribunal] for confirming order, objections by creditors, and settlement of list of objecting creditors
(1) Where a company has passed a resolution for reducing share capital, it may apply, by petition, to the1[Tribunal] for an order confirming, the reduction.
(2) Where the proposed reduction of share capital involves either the diminution of liability in respect of unpaid share capital or the payment to any shareholder of any paid-up share capital, and in any other case if the1[Tribunal] so directs, the following provisions shall have effect, subject to the provisions of sub-section (3): -
(a) every creditor of the company who at the date fixed by the1[Tribunal] is entitled to any debt or claim which, if that date were the commencement of the winding up of the company, would be admissible in proof against the company, shall be entitled to object to the reduction;
(b) the1[Tribunal] shall settle a list of creditors so entitled to object, and for that purpose shall ascertain, as far as possible without requiring an application from any creditor, the names of those creditors and the nature and amount of their debts or claims, and may publish notices fixing a day or days within which creditors not entered on the list are to claim to be so entered or are to be excluded from the right of objecting to the reduction;
(c) where a creditor entered on the list whose debt or claim is not discharged or has not determined does not consent to the reduction, the1[Tribunal] may, if it thinks fit, dispense with the consent of that creditor, on the company securing payment of his debt or claim by appropriating, as the1[Tribunal] may direct, the following amount: -
(i) if the company admits the full amount of the debt or claim, or, though not admitting it, is willing to provide for it, then, the full amount of the debt or claim;
(ii) if the company does not admit and is not willing to provide for the full amount of the debt or claim, or if the amount is contingent or not ascertained, then, an amount fixed by the1[Tribunal] after the like inquiry and adjudication as if the company were being wound up by the1[Tribunal] .
(3) Where a proposed reduction of share capital involves either the diminution of any liability in respect of unpaid share capital or the payment to any shareholder of any paid-up share capital, the1[Tribunal] may, if, having regard to any special circumstances of the case, it thinks proper so to do, direct that the provisions of sub-section (2) shall not apply as regards any class or any classes of creditors.

________________________
1. Substituted by Act 11 of 2003, Section 14, for "Court".
________________________________________
Section 102 - Order confirming reduction and powers of court on making such order
________________________________________
 
The1[Tribunal] , if satisfied with respect to every creditor of the company who under section 101 is entitled to object to the reduction, that either his consent to the reduction has been obtained or his debt or claim has been discharged, or has determined, or has been secured, may make an order confirming the reduction on such terms and conditions as it thinks fit.
(2) Where the1[Tribunal] makes any such order, it may -
(a) if for any special reason it thinks proper so to do, make an order directing that the company shall, during such period commencing on, or at any time after, the date of the order, as is specified in the order, add to its name as the last words thereof the words "and reduced"; and
(b) make an order requiring the company to publish as the1[Tribunal] directs the reasons for reduction or such other information in regard thereto as the1[Tribunal] may think expedient with a view to giving proper information to the public and, if the1[Tribunal] thinks fit, the causes which led to the reduction.
(3) Where a company is ordered to add to its name the words "and reduced", those words shall, until the expiration of the period specified in the order be deemed to be part of the name of the company.
 

________________________
1. Substituted by Act 11 of 2003, Section 14, for "Court".
________________________________________
Section 103 - Registration of order and minute of reduction
________________________________________
             (1) The Registrar -
(a) on production to him of an order of the1[Tribunal] confirming the reduction of the share capital of a company; and
(b) on the delivery to him of a certified copy of the order and of a minute approved by the1[Tribunal] showing, with respect to the share capital of the company as altered by the order, (i) the amount of the share capital, (ii) the number of shares into which it is to be divided, (iii) the amount of each share, and (iv) the amount, if any, at the date of the registration deemed to be paid-up on each share;
shall register the order and minute.
(2) On the registration of the order and minute, and not before, the resolution for reducing share capital as confirmed by the order shall take effect.
(3) Notice of the registration shall be published in such manner as the1[Tribunal] may direct.
(4) The Registrar shall certify under his hand the registration of the order and minute, and his certificate shall be conclusive evidence that all the requirements of this Act with respect to reduction of share capital have been complied with, and that the share capital of the company is such as is stated in the minute.
(5) The minute when registered shall be deemed to be substituted for the corresponding part of the memorandum of the company, and shall be valid and alterable as if it had been originally contained therein.
(6) The substitution of any such minute as aforesaid for part of the memorandum of the company shall be deemed to be an alteration of the memorandum within the meaning and for the purposes of section 40.

________________________
1. Substituted by Act 11 of 2003, Section 14, for "Court".
________________________________________
Section 104 - Liability of members in respect of reduced shares
________________________________________
 
(1) A member of the company, past or present shall not be liable, in respect of any share to any call or contribution exceeding in amount the difference, if any, between the amount paid on the share or the reduced amount, if any, which is to be deemed to have been paid thereon, as the case may be, and the amount of the share as fixed by the minute of reduction:
Provided that, if any creditor entitled in respect of any debt or claim to object to the reduction of share capital is, by reason of his ignorance of the proceedings for reduction or of their nature and effect with respect to his debt or claim, not entered on the list of creditors, and after the reduction the company is unable, within the meaning of section 434, to pay the amount of his debt or claim, then -
(a) every person who was a member of the company at the date of the registration of the order for reduction and minute, shall be liable to contribute for the payment of that debt or claim an amount not exceeding the amount which he would have been liable to contribute if the company had commenced to be wound up on the day immediately before the said date; and
(b) if the company is wound up, the1[Tribunal] , on the application of any such creditor and proof of his ignorance as aforesaid, may, if it thinks fit, settle accordingly a list of persons so liable to contribute, and make and enforce calls and orders on the contributories settled on the list, as if they were ordinary contributories in a winding up.
(2) Nothing in this section shall affect the rights of the contributories among themselves.
________________________
1. Substituted by Act 11 of 2003, Section 14, for "Court".
________________________________________
Section 105 - Penalty for concealing name of creditor, etc.
________________________________________
 
If any officer of the company —
(a) knowingly conceals the name of any creditor entitled to object to the reduction;
(b) knowingly misrepresents the nature or amount of the debt or claim of any creditor; or
(c) abets or is privy to any such concealment or misrepresentation as aforesaid,
he shall be punishable with imprisonment for a term which may extend to one year, or with fine, or with both.
________________________________________
Last updated on August, 2016

Find a Lawyer

Legal Hall of Fame

The current Legal Luminaries of India, the credible names in the legal circle along with those who would be the leading stars of the next decade. These are some of the reliable names in field of law. Nominate the Legal Stars of tomorrow

More

Recent Judgment


Sudha Mishra vs. Surya Chandra Mishra( R.F.A 299 of 2014

The Hon'ble High Court of Delhi in Sudha Mishra vs. Surya Chandra Mishra (R.F.A 299 of 2014)has ruled that a woman has a right over the property of her husband but she cannot claim a right to live in the house of her parents-in-law

More

Bare Acts

Helpline Law provides a user friendly compendium of Indian Law & Bare Acts. Get a complete list & detail of Indian Bare Acts, with amendments and repeals. It comes with easy-to-use features like Search by bare acts & by year. You can even email the information to yourself!

More

Have a Legal Matter ?
Need a Lawyer?

Have a Legal Matter ?

Need a Lawyer?

Male
Female