Alteration of Share Capital

The authority for a limited liability company to alter its share capital is outlined in section 64(1) of the Companies Act. This authority can only be exercised during a general meeting of the company and must be explicitly sanctioned by its articles of association. A company with shares can make adjustments to the capital clause in its Memorandum through various methods, subject to authorization in its articles of association. These methods include:

Increase in Share Capital: The company can augment its share capital by introducing new shares of an amount deemed appropriate.

Consolidation and Division: The company has the flexibility to consolidate and divide its share capital, converting them into shares of larger denominations than the existing ones.

Conversion of Shares to Stock and Vice Versa: The company may convert fully paid shares into stock and revert stock back into fully paid shares of any denomination.

Subdivision of Shares: The company can subdivide shares or any class of shares into smaller amounts as specified in the Memorandum. The subdivision maintains the proportional relationship between the amount paid and any unpaid portion on each reduced share.

Cancellation of Shares: Unclaimed or unagreed shares may be canceled by the company, leading to a reduction in the share capital by the amount of the canceled shares.

Importantly, the alteration of the company's capital through any of these methods can be achieved by passing a resolution during a general meeting and does not necessitate court confirmation.