Increase in share capital ss. 64 -67

The nominal share capital of a company can be increased through an ordinary resolution in a general meeting, even if it hasn't fully issued all its authorized capital. Typically, a company's articles grant the authority for such an increase. However, if the articles don't permit it, they must be altered by a special resolution. The law mandates that if the company increases its share capital beyond the registered capital, notice must be given to the registrar within thirty days from the date of passing the resolution effecting the increase.

It's important to note that any increase in share capital should not be done with malicious intent. In the case of Clemens v. Clemens Bros. Ltd (1976) 2 All E.R 268, resolutions to increase the capital and issue new shares were set aside as they were seen as an inequitable use of the company's rights. The resolutions were designed to dilute the plaintiff's holding and voting power from 45% to 25%, thus depriving her of what was termed as her "negative control" — the power to prevent the passage of any special resolution of which she disapproved.

In another case, Tanzania Knitwear Ltd. v. Shamsu Esmail (1989) 1 T.L.R 48, directors passed a resolution to issue 800 shares, offering each shareholder the opportunity to purchase the shares based on their individual shareholding. It was held that when shareholders are offered the chance to buy new shares on a pro-rata basis, an applicant cannot complain that the resolution is oppressive. However, the resolution was declared illegal because it was passed by directors contrary to the requirement of section 51(2) of the Companies Ordinance, which mandated such resolutions to be passed by a company in a general meeting.