How to Alter the Share Capital for Companies Registered in Pakistan

Company registration in Pakistan and provisions regarding alteration of share capital

A company after having registration in Pakistan can alter its share capital subject to certain conditions which are mentioned as under:

First requirement for alteration of share capital is that the authority to alter the share capital must have been provided by the articles of association of the company or in simple words the fact that company can increase the amount of its share capital if it requires in future must be mentioned in the articles of association of the company.

Normally alteration in the capital of the company is made for following purposes:

Company registered tends to increase its share capital for any business purposes.

Company also alters its share capital if it intends to increase the per share value of its share capital or reciprocally to decrease the amount of share capital.

Company also has the powers to cancel any share capital which is not been agreed to be taken by any person.

The company before using any of the above mentioned has to place a resolution for such alteration before the general meeting of the members of the company and the resolution must be approved by the meeting by a majority of at least 2/3.

The company is also required to file a notice before the registrar of the companies that it intends to use any such powers to alter the structure of its share capital within 15 days of passing the resolution.

However the important thing to remember is that alteration of share capital should not in any way effect the patern of shareholding or in simple words if a shareholder owns 25% of the share capital before alteration, the same shareholder after alteration must have same voting power in the new capital structure.

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