Procedure For Variation Of Members’ Rights

Section 48 Procedure For Variation Of Members’ Rights

Step 1

Check the Memorandum and Articles of Association of the company, whether any of them authorizes the company to varythe rights attached to any class of shares and such rights of the company are not prohibited by either of them and also by the terms of issue of that classof shares. If not, then, alter the Articles of Association of the company to that effect.

Step 2

Issue notice in accordance with the provisions of section 173(3) of the Companies Act, 2013, (not less than 7 daysin writing) for convening a meeting of the Board of Directors

Step 3

Informthe Stock Exchange with which shares of the company are listed atleast 2 daysbefore the Board meeting about the subject of this meeting

Step 4

Convene and hold a Board meeting to decidethe way to adopt for variations, either through-

(a)obtaining written consent of the holders of not less than three-fourths of theissued shares of that class; or

(b)convening a separate meeting of the holders of the issued shares of that classfor passing a special resolution thereat.

Step 5

Ifthe Board approves the first method as mentioned in Step 4(a) above, then:

·        approvethe resolution for circulation among the holders of the issued shares of thatclass, and

·        circulatesuch resolution amongst the holders and obtain their approval in writing of atleast three- fourths of the issued shares of that class.

Step 6

Ifthe Board approves the second method as mentioned in Step 4(b) above, or thecompany fails to obtain written approval from the holders of not less thanthree-fourths of the issued shares of that class then —

·        authorize the company secretary to convene a separate meeting of the holders of theissued shares of that class; and

·        approve the notice of such meeting containing special resolution with an explanatory statement relating thereto and a proxy form.

Step 7

Inform the said Stock Exchange within 15minutes of the board Meeting, of the outcome of the meeting by letter or fax.

Step 8

Issue notice of not less than twenty-one (21) clear days for convening General Meeting to every member of the company, Directors and auditor.

Step 9

In case of listedcompany, send three copies of the notice to the STOCK EXCHANGES on which thesecurities of the company are listed.

Step 10

Holdthe separate meeting of the holders of issued shares of that class and pass special resolution so proposed by three-fourths majority of the holderspresent.

Note:In case of listed company, special resolution is passedonly through postal ballot.

Step 11

In case of listed company, send copy of the proceedings of thegeneral meeting to the STOCK EXCHANGE with which the company is listed.

Step 12

E-form Filing

Inboth the cases, file Form MGT-14 within 30 days of passing of Special Resolution with the concerned Registrar ofCompanies along with

·        Notice of EGM

·        Certified true copy of the Special Resolution

Step 13

Informthe stock exchange where the shares of that class are listed about the variationin the members’ rights thereof.

Step 14

Ifvariation affects the rights of the holders of other class of shares,simultaneously obtain consent or approval from them.

Step 15

Onvariation becoming effective, make necessary changes in all the papers, documents,registers etc.

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Thanks & Regards

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RAVI GARG (CS)     

91-7838204665, 

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