Review of Joint Venture Agreement

• Start by examining the JV agreement to verify conditions for altering capital.
  
• Ensure all partners agree to the proposed increase in share capital.
  
• Check for clauses regarding pre-emptive rights, voting thresholds, and funding obligations.
  
• Legal and financial advisors should be consulted to interpret terms accurately.
  
• Any restriction or requirement in the agreement must be honored.
  

Board Approval

• A board meeting is convened to propose the capital increase.
  
• Directors pass a resolution approving the draft proposal.
  
• The resolution includes details of the new capital structure and issuance terms.
  
• Board approval authorizes management to proceed with shareholder consent.
  
• Minutes of the meeting must be recorded and retained.
  

Shareholders’ Approval

• An extraordinary general meeting (EGM) of shareholders is called.
  
• A special resolution is passed to authorize the increase in authorized share capital.
  
• The resolution must be filed with the Registrar or corporate authority.
  
• Voting thresholds are typically a two-thirds majority unless otherwise specified.
  
• Updated capital details are entered in the statutory records.
  

Regulatory Filing and Documentation

• File the necessary forms with the corporate regulatory body (e.g., MCA in India).
  
• In India, Form SH-7 is filed to increase the authorized share capital.
  
• Payment of applicable stamp duty and registration fees is required.
  
• Updated Memorandum of Association (MoA) and Articles of Association (AoA) may be submitted.
  
• Approvals must be obtained before issuing new shares.
  

Issuance of New Shares

• Shares can be issued to existing partners in proportion to current holdings.
  
• Alternatively, new investors may be brought in if permitted by the JV terms.
  
• Offer letters, share application forms, and allotment records are prepared.
  
• Share certificates are issued, and registers are updated accordingly.
  
• Post-allotment filings, such as Return of Allotment (Form PAS-3 in India), are completed.