A Simple Guide to Cancelling Shares in an Indian Company
Cancelling shares in India is a structured legal process that directly impacts ownership, voting rights, and overall capital structure. Whether you’re a founder, investor, or business owner, understanding how share cancellation works in India is essential for maintaining compliance with the Companies Act, 2013. This guide explains everything in simple language—why shares are cancelled, what types of shares can be cancelled, and the exact steps involved. You’ll learn how equity shares, preference shares, and DVRs are treated during cancellation, the approvals required from shareholders and the Board, and the mandatory filings with the Registrar of Companies (ROC). We also highlight the documentation needed, timelines to follow, and common compliance mistakes companies should avoid to prevent penalties.
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