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Alteration of Share Capital - 4 Video Lecture | Advanced Corporate Accounting - B Com

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FAQs on Alteration of Share Capital - 4 Video Lecture - Advanced Corporate Accounting - B Com

1. What is the process involved in the alteration of share capital?
Ans. The alteration of share capital involves changing the structure of a company's share capital, which can include increasing or decreasing the number of shares, changing the nominal value of shares, or converting shares from one class to another.
2. When can a company alter its share capital?
Ans. A company can alter its share capital through a special resolution passed by its shareholders, following the procedures outlined in the Companies Act and the company's articles of association.
3. What are the reasons for altering share capital?
Ans. Companies may alter their share capital to facilitate mergers or acquisitions, to raise additional capital, to restructure the company's ownership, or to comply with regulatory requirements.
4. How does altering share capital impact existing shareholders?
Ans. Altering share capital can dilute the ownership percentage of existing shareholders if new shares are issued or can increase the value of existing shares if the nominal value is changed. Shareholders must carefully consider the implications of any proposed alterations.
5. What are the potential risks of altering share capital?
Ans. Risks associated with altering share capital include potential conflicts between shareholders, legal challenges if the alteration is not properly executed, and negative impacts on the company's reputation or share price. It is essential for companies to seek professional advice before making any changes to their share capital.
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